Probate Wars – the Anna Nicole Smith Probate Saga
Stripping and Being Stripped
Vickie Lynn Marshall stunned everyone when she died unexpectedly in February 2007 at the age of 39. Her death, like her life, ignited a firestorm of media coverage.
Having a hard time remembering just who Vickie Lynn Marshall was? That’s probably because you know her better for her colorful professional career…as an iconic sex symbol. In the 1990’s she epitomized the definition of a blonde bombshell. Her curves seared the pages of Playboy Magazine leaving little to the imagination, and in 1993 she captured the Playmate of the Year title, solidifying her as an American sex icon. Hers was the face of Guess Jeans and her image appeared in magazines, on television, and in numerous modeling ads. If you are still struggling to figure out who she was, perhaps you knew her by her professional name: Anna Nicole Smith.
Vickie Lynn Marshall – widely (and hereinafter) known as Anna Nicole Smith – may have grabbed national attention as a model, but she stole the media spotlight in 1994 when, at the age of 26, she married elderly 89-year-old self made billionaire, J. Howard Marshall, II.
Marshall, a Yale law school graduate earned his money the old fashioned way; academic excellence, hard work and an entrepreneurial spirit. Though he served on the Yale Faculty, and later became assistant Dean of Yale Law School, it was oil that ran through his veins. He co-wrote two articles about oil industry regulations that in 1933 led to his employment in our Nation’s capital to work for the Secretary of the Interior, Harold Ickes. Thereafter he served as special counsel to the President of Standard Oil (now Chevron), then became a partner in a major law firm. Some earn their wealth the old fashioned way; others marry into it, while some simply stumble upon it – like Jed. Oh you must remember The Beverly Hillbillies? If not, then listen to a story about a man named Jed. He was a poor mountaineer, and barely kept his family fed. But then, one day he was shootin’ at some food, and up through the ground came some bubblin’ crude. Oil that is, black gold, Texas tea.
Marshall didn’t stumble upon his fortunes, but sure enough, his well was filled by the same Texas Tea. With his impressive academic background, experience in our Nation’s capital as well as the boardroom, his pump was primed and he was well positioned to co-found The Great Northern Oil Company with Fred C. Koch. Under the stewardship of these two titans, the company grew, into what is now one of the largest privately owned family businesses in the United States – Koch Industries.
At the time of his demise, J. Howard Marshall, II owned 16% of Koch Industries and that asset alone earned him his spot on the elite list of U.S. Billionaires. But we know that all work and no play makes Jack a dull boy, and though Marshall could travel in the circles of high society and join any club he so desired, it was a gentlemen’s club that bubbled his crude. And so it was, the 87-year-old Ivy League oil tycoon was taking in the sights at Gigi’s, a Texas go-go bar, and like a moth drawn to the fire, he cast his eyes on one hot number – Anna Nicole Smith.
In the words of Jackson Brown, both of them were “running on empty”. In the love and longevity column, his tank was running on fumes. He was divorced, his second wife died, one of his two sons had apparently crossed him in a palace coup at Koch Industries and consequently earned the proverbial – “you’re out Tom” and the other son, E. Pierce Marshall simply couldn’t provide the lift that Anna could. Maybe the lonely octogenarian needed companionship or maybe he simply wanted to go out with a bang. Her tank seemed starved for fame, fortune and attention and maybe, just maybe, a marriage to an 89-year-old elderly billionaire could fill her void. Maybe they both got what they wanted – as only 13 months after they exchanged vows, J. Howard Marshall, II died. But there were too many maybes and not enough certainties.
Anna Nicole, not quite 28, was a widow. After reading the Will, or having it read to her, she must have been shocked to find out her well would soon run dry. She was omitted – no bequest, no trust fund, no trinkets. Though her hubby had gifted assets to her worth approximately $6,000,000 during her lifetime, she wasn’t the object of his affection in his Revocable Trust. Odd that J. Howard Marshall, II, a Yale lawyer and astute businessman allegedly signed a new Will and amended his Revocable Trust just days after his marriage to 26-year-old bombshell, and left her nothing. In fact the Will didn’t even recognize her as his spouse. That same Will and Revocable Trust also cut out one son, and then there was one, just one beneficiary – E. Pierce Marshall, who by the way, was involved in his father’s estate planning and who stood to inherit the billion dollar fortune. Was J. Howard Marshall, II’s estate plan the product of undue influence or worse yet, fraud?
Though there was plenty of money to amicably resolve any probate dispute, such was not the path chosen by the parties, or their counsel. It did not take long before the fate of the $1.6 billion estate was in litigation. According to Anna Nicole, J. Howard Marshall, II orally promised her half of his estate. But a jury of her Texas-peers rejected her claims, and in 1996 they decided Anna had no claim to the estate. The battle, however, was far from over.
That same year, 1996, Anna Nicole Smith filed for bankruptcy protection in California, and E. Pierce Marshall filed a claim as one of her creditors. In a story full of the unexpected, the bankruptcy judge didn’t disappoint. Though estate litigation is typically filed and decided in state court – not federal court, the federal bankruptcy judge awarded her $447,000,000 of J. Howard Marshall, II’s estate. What’s interesting about that number is that it’s close to one-third of the estate, the amount that had the Court tied the award to Anna Nicole’s elective share claim, would have made sense. But the Bankruptcy Court didn’t tie the number into the elective share claim and therefore it was unclear what the award represented. The ruling did however help land Anna Nicole on the cover of Playboy, again, but this time as the “$450,000,000 Playmate.”
- Pierce Marshall must have been blown away, and appealed the Bankruptcy Courts decision. In 2002 U.S. District Court Judge David Carter reduced the award to just $88,500,000. Another appeal, and this time, the 9th Circuit Court of Appeals threw out Judge Carter’s award and ruled that the Federal Court did not have jurisdiction over the case. Anna Nicole contested this ruling, taking her argument to the highest authority in the land: The United States Supreme Court. The Justices of the Supreme Court, in a unanimous decision issued in May 2006, ruled that Anna Nicole did have legal grounds to challenge J. Howard Marshall, II’s Will in Federal Court. The Court, however, did not decide the issue of whether she was entitled to the $447,000,000 or $88,500,000 or some other amount, or nothing – that would be left to yet another Court.
- Pierce Marshal had fought for years trying to extinguish any rights that Anna Nicole Smith might have in and to his father’s estate. But he would not see victory during his lifetime. He died in June of 2006, and therefore his heirs are burdened with continuing legal drama.
Unfortunately, in September of 2006, before any Court resolved the disposition of J. Howard Marshall, II’s estate, Anna Nicole’s life took a bittersweet turn. Just three days after being blessed with a beautiful daughter, Dannielynn, her joy was overshadowed by her son’s death. Just 20-years-old, and the joy of Anna’s life, Daniel Smith, born from her first marriage to Billy Smith, died while visiting his Mom and step-sister in the hospital. How traumatic for anyone – the birth of a daughter and the death of a son within a three day period. Despite Daniel’s death, and the birth of Dannielynn, Anna Nicole did not alter her own Will. Only six months later, her own life was unexpectedly cut short on February 8, 2007 from what Dr. Sanjay Gupta deemed a toxic concoction of prescription drugs. Whether she suffered from post mortem depression and depression from the loss of her son – we’ll never know. Anna’s death however, created a veritable legal hurricane that placed her infant daughter, Dannielynn in the eye of the storm. Anna’s Will may as well have been printed on flash paper as it burned up the tabloids because it expressly cut out her newborn as a beneficiary of her estate, and provided only for her son Daniel who had predeceased her. Excerpts of Anna’s Last Will & Testament follow:
LAST WILL AND TESTAMENT of VICKIE LYNN MARSHALL
I, VICKIE LYNN MARSHALL, also known as Vickie Lynn Smith, and Vickie Lynn Hogan, and Anna Nicole Smith, a resident of Los Angeles County, California, declare that this is my Will. I revoke all prior Wills and Codicils. I hereby dispose of all property that I am entitled to dispose of by Will and exercise all general powers of appointment that I am entitled to exercise. I have not entered into a contract to make or not revoke a Will.
ARTICLE I: FAMILY DECLARATIONS AND STATUTORY DISINHERITANCES
I am unmarried. I have one child DANIEL WAYNE SMITH. I have no predeceased children nor predeceased children leaving issue. Except as otherwise provided in this Will, I have intentionally omitted to provide for my spouse and other heirs, including future spouses and children and other descendants now living and those hereafter born or adopted, as well as existing and future stepchildren and foster children.
ARTICLE II: DISPOSITION OF ESTATE
All of the property of my estate (the “residue”), after payment of any taxes or other expenses of my estate as provided below, including property subject to a power of appointment exercised hereby, shall be distributed to HOWARD STERN, ESQ., to hold in trust for my child under such terms as he and a court of competent jurisdiction may declare, such that my children are distributed sufficient sums for the health, education, and support according to their accustomed manner of living from either the income or principal of the trust until age twenty-five; and are at that time given one-third of all of the income of the trust and one-third of the principal of the trust as then constituted; and at thirty are given one-half of the income from the trust and one-half of the principal of the trust as then constituted; and at thirty-five are given all of the principal of the trust. If, in the discretion of the Trustee, the amount remaining in the Trust is too small to efficiently administer, he may give all of the corpus of the Trust to my child at once.
ARTICLE III: PROVISIONS REGARDING EXECUTORS
3.1 Nomination of Executor.
I nominate as Executor and as successor Executors of this Will those named below. Each successor Executor shall serve in the order and priority designated if the prior designated Executor fails to qualify or ceases to act.
First: HOWARD STERN, Esq.
Second: RON RALE, Esq.
Third: ERIC JAMES LUND, Esq.
Fourth: Wells Fargo Bank (Sandra K. Von Paul) or its successors by merger, consolidation, or otherwise.
3.2 Power to Nominate Executor.
If all of the foregoing Executors are unable or unwilling to act, the majority of the adult beneficiaries under this Will shall have the power to designate as successor Executor any corporate fiduciary having assets under management of at least Two Hundred Fifty Million Dollars ($250,000,000). Such designation shall be filed with the court in which this Will is probated.
3.3. Waiver of Bond.
I request that no bond be required of any Executor nominated above, including nonresidents, whether such Executor is acting alone or together with another.
3.4. Powers of Executor.
My Executor shall have the following powers in addition to all powers now or hereafter conferred by law, and except as otherwise expressly provided, shall have the broadest and most absolute permissible discretion in exercising all powers. I intend and direct that the probate court uphold any action taken by my Executor, absent clear and convincing evidence of bad faith or gross negligence.
3.4.1. Independent Administration.
My Executor may administer my estate with full authority under the California Independent Administration of Estates Act.
3.4.2. Tax Elections and Decisions.
My Executor may value my gross estate for federal estate tax purposes as of the date of my death or any permissible alternate valuation date, my claim any items of expense as income or estate
My Executor may disclaim all or any portion of any bequest, devise or trust interest provided for me under any Will or Trust. In particular, I authorize and encourage my Executor to try to obtain overall tax savings, even though this may change the ultimate recipients of the property that is disclaimed.
3.4.4. Limitations on Tax Elections and Decisions. Omitted.
3.4.5. Management and Administrative Powers of Executor. Omitted
3.5. Resignation of Executor.
My Executor may resign at any time (a) by filing a written instrument with the court having jurisdiction over my estate, or (b) by giving written notice to all successor Executors.
3.6. Successor Executors.
All authority, titles and powers of the original Executor shall automatically pass to a successor Executor. A successor Executor may accept as correct or contest any accounting made by any predecessor Executor; provided that a successor Executor shall be obligated to inquire into the propriety of any act or omission of a predecessor if so requested in writing by a Trustee of the Trust, any Protector of the Trust, or any adult beneficiary or the guardian of a minor beneficiary of the Trust within ninety (90) days of the date that the successor is appointed.
3.7. Liability of Executor. Omitted.
3.8. Executor’s Authority to Transfer to Trust.
I hereby authorize my Executor (or the person nominated to serve as Executor even if no Letters Testamentary are issued) to transfer to the Trustee of the Trust any asset and to execute any document in connection with any such transfer to the extent necessary or appropriate to carry out any assignment of assets to the Trust.
If more than one person is serving as Executor, one Executor acting alone may transfer securities and execute all documents in connection therewith; open accounts with one or more bank and savings and loan associations; authorize deposit or withdrawal of funds to or from accounts; and sign checks. Transfer agents, corporations and financial institutions dealing with a single Executor as provided in the preceding sentence shall have no liability as a consequence of dealing with only one Executor. My Executor may delegate any ministerial duties to any Co-Executor.
ARTICLE IV: GENERAL PROVISIONS
4.1 No Interest.
No interest shall be paid on any gift hereunder, except to the extent necessary to qualify for the marital deduction.
4.2. Life Insurance Policies. Omitted.
4.3.1. Number and Gender.
In all matters of interpretation, the masculine, feminine and neuter shall each include the other, as the context indicates, and the singular shall include the plural and vice versa.
The headings in this Will are inserted for convenient reference and shall be ignored in interpreting this Will.
4.3.3. Severability of Provisions.
If any provision hereof is unenforceable, the remaining provisions shall remain in full effect.
4.4. Governing Law.
The validity, interpretation, and administration of this Will shall be governed by the laws of the State of California in force from time to time.
ARTICLE V: TAXES AND OTHER EXPENSES OF MY ESTATE
ARTICLE VI: NO CONTEST; DISINHERITANCE
6.1. Contestants Disinherited.
If any legal heir of mine, any person claiming under any such heir, or any other person, in any manner, directly or indirectly, contests or attacks this Will or the Trust or any of the provisions of said instruments, or conspires with or assists anyone in any such contest, or pursues any creditor’s claim that my Executor reasonably deems to constitute a contest, any share or interest in my estate or the Trust is revoked and shall be disposed of as if the contesting beneficiary had predeceased me without descendants, and shall augment proportionately the shares of my estate passing to or in trust for my beneficiaries who have not participated in such acts. This Article shall not apply to a disclaimer. Expenses to resist a contest or other attack of any nature shall be paid from my estate as expenses of administration.
6.2. General Disinheritance.
Except as otherwise provided herein and in the Trust, I have intentionally omitted to provide for any of my heirs, or persons claiming to be my heirs, whether or not known to me.
ARTICLE VII: OFFICE OF GUARDIAN
7.1. Nomination of Guardian of the Person.
I nominate HOWARD STERN as guardian and successor guardian of the person of my minor child DANIEL WAYNE SMITH:
Any such nominee who is a resident of a state other than California may, at the nominee’s election, file a petition for appointment in such other state and/or in California. I request that any court having jurisdiction permit the guardian to change the residence and domicile of my minor children to the jurisdiction where the guardian resides.
I give the guardian of the person of my minor children the same authority as a parent having legal custody and authorize the guardian to exercise such authority without need for notice, hearing, court authorization, instructions, approval or confirmation in the same manner as a parent having legal custody. I request that no bond be required because of the grant of these independent powers.
7.2. Waiver of Bond.
I request that no bond be required of any guardian nominated above.
I subscribe my name to this Will at Los Angeles, California, on this 30th day of July, 2001.
Anna Nicole Smith
Anna Nicole Smith’s Last Will and Testament is a classic example of an outdated, ineffective Will. Though the Will indicated she had no predeceased children, she sadly did have a predeceased child, Daniel. Then, mistake #2, the Will precluded a future child from being a beneficiary, but at the time of her death, she had a child born after the Will was executed. Mistake number #3, she named as Executor and Trustee a person who as it would turn out, had an issue with the beneficiary. Anna named Howard Stern as Executor and Trustee of her estate. After Anna died, Howard Stern unsuccessfully tried to establish himself as the father – but DNA testing confirmed he wasn’t Dannielynn’s dad and DNA testing confirmed Larry Birkhead was Dannielynn’s dad.
How did we ever resolve such claims before DNA testing? If we had DNA testing centuries ago, how many servants would be kings, and how many kings would be servants? And Amos, or was it Andy, would know if he was the father of Roxie Hart’s baby, or if Fred Casley, the bugler … or furniture salesman who gave her ten percent off, was really the father. Oh wait, if Roxie got a real pregnancy test, then we wouldn’t need a DNA test. All these tests can really take the fun out of conception – but they do add clarity to the estate planning process. Anyway … an odd position for Howard Stern who as executor of Anna Nicole’s Estate now had to fight for assets for a beneficiary whom he thought was his daughter, but isn’t.
The legal battle over J. Howard Marshall II’s estate that had plagued Anna Nicole for most of her adult life, rumbled on after she died. Almost a year after Anna Nicole died, in 2008 a Los Angeles judge ruled that Dannielyn, was the only the beneficiary of Anna Nicole’s estate. Accordingly, Howard Stern, as executor of Anna Nicole Smith’s estate had to prosecute the claim on behalf of Anna Nicole’s estate that it should be a beneficiary of J. Howard Marshall’s billion dollar estate. How strange would that be, J. Howard Marshall II’s fortunes passing to Anna Nicole Smith’s daughter who was born 11 years after Marshall II’s death.
While the 2008 decision marked the end of Dannielynn’s fight for her mother’s estate, the fight for her mother’s share of the J. Howard Marshall II fortune had only just begun. Dannielynn could inherit the millions of dollars her mother so vigorously sought, but not without a fight. Accordingly, her counsel filed a Writ on March 9, 2009 with the United States Supreme Court asking for authority to start collecting at least the $88,500,000 awarded to Anna Nicole in 2002. Meanwhile, Anna Nicole’s adversary, E. Pierce Marshall, also died, yet the litigation raged on. The new contestants were: the Estate of E. Pierce Marshall v. the Estate of Anna Nicole Smith, both seeking to establish their rights in and to the Estate of J. Howard Marshall, II. E. Pierce Marshall’s estate litigation lawyers fought back, claiming the 2002 award is invalid given the 9th Circuit Court of Appeal’s reversal of the 2002 decision. They maintained that although the Supreme Court disagreed with the 9th Circuit on the issue of Federal jurisdiction, the Court did not uphold the $88,500,000 judgment. On March 13, 2009 the United States Supreme Court rejected the attempt to accelerate collection and denied the Writ, and on March 19, 2010, the 9th Circuit, on remand from the U.S. Supreme Court, issued their own embargo. According to the Court, Anna Nicole Smith and her estate are entitled to nothing, as the finding of the Texas probate court was a final judgment and precludes Federal Court jurisdiction on the issue of undue influence and tortuous interference. At least it’s over – right? Nope, the executor of Anna Nicole Smith’s estate appealed and the United States Supreme Court granted certiorari, meaning the highest Court will hear this…again.
The perverse battle over J. Howard Marshall II’s fortunes has lasted over 15 years, and continues even after the deaths of the primary potential beneficiaries, Anna Nicole or E. Pierce Marshall, and it’s not over yet. Google the name and image of J. Howard Marshall, II and you find much more about the bizarre marriage and ensuing probate litigation than his awesome professional accomplishments. Anna Nicole’s quest for fame and fortune ended sadly, and Dannielynn, who never met J. Howard Marshall, II, and is not in his gene pool, but could be the heir to the fortune. And sadly, neither of Marshall’s sons will enjoy their father’s Texas Tea. Given all the resources that J. Howard Marshall, II had at his fingertips, combined with Anna Nicole’s likely motivation for marriage, it’s simply astounding that his legacy was so exposed and so compromised by both an ill conceived or manipulated estate plan and the lack of a prenuptial agreement. And while few may be sympathetic to the motivations of Anna Nicole Smith, in fairness to her, her life was left in limbo, turned upside down by uncertainty, bankruptcy, legal bills, and the roller coaster of judicial findings.
In the end, they both sold out. She sold out love for money, and he sold out the institution of marriage for sexual gratification. In the end, they really screwed themselves…a crude reality.
Legacy Lesson # 5: The Elective Share & Prenuptial Agreement
How could a brilliant billionaire like J. Howard Marshall, II get married without a prenuptial agreement? Many think of negotiating a prenuptial agreement as a distasteful process but recognize it’s a necessary evil. Once the agreement is completed, the newlyweds’ rights and responsibilities in the event of a divorce are spelled out. For the agreement to have any teeth, both parties must have their own counsel and there must be full disclosure of their income and assets. All true, but most people don’t recognize the importance of, what seems like a boilerplate clause in the agreement, in which both parties waive their right of election and waive their rights in and to each others estate. Because many legislators didn’t like the idea of spouses disinheriting each other, the right of election protects a disinherited spouse so that he or she has the right to opt against their deceased spouse’s estate and claim an entitlement to approximately one-third of that estate. Generally, assets gifted or transferred to each other during their lifetimes would count as a credit toward the one-third elective share claim. Alternatively, spouses negotiating a prenuptial agreement may agree to waive the elective share claim, and then agree upon the distribution of assets in the event of one spouses demise. For example, if J. Howard Marshall, II and Anna Nicole Smith entered into a prenuptial agreement, and she waived her right of election, but agreed instead to a fixed bequest of $20,000,000 or a fixed percentage of the gross estate, say 5%, then little would be left to chance or interpretation. Note however, when using a percentage of the gross estate, sometimes beneficiaries battle over the valuation of an asset which is part of the estate, by way of example, a business interest, intellectual property rights, or royalties. Accordingly, a fixed bequest may be the preferable route.
There’s no right or wrong amount that a surviving spouse should inherit, but from a practical point of view, if the prenuptial agreement provides the safety net of a home and a reasonable sum of money, both being either outright or in trust, it goes a long way toward keeping the peace and marital bliss. If such planning considerations were a universal predicate to a second marriage, much of the probate litigation currently docketed, wouldn’t have been filed, and more importantly, the widow or widower could afford to grieve and co-exist peacefully with the children from prior marriages.
Legacy Lesson #6: Providing Equitably for a Second Spouse and Children From a Prior Marriage
There’s this story, of a lovely lady, who, as the story was told, was bringing up three very lovely girls. All the girls had golden hair, like their mother, and the youngest one had golden curls. There’s a similar story, of a man named Brady, who was raising three boys of his own. They were four men, living all together, but clearly, they were all alone. Well, one day the lady met this fellow on match.com. And they knew it was much more than a hunch. They felt that this group, after exchanging prenuptials, must somehow form a family and that’s how they all became the Brady Bunch.
Did you see the episode when Carol was busy packing for the Brady’s trip to Hawaii, had a heart attack and died? Me neither. But, if it were an episode, and Carol’s Will left everything to Mike, would Marsha, Jan and Cindy sue their beloved step father? Well, maybe just Jan. But put the Brady’s aside, because they’d resolve everything amicably anyway. Think of your family, your friends family or for that matter any blended family that makes up a such big part of America’s fabric and ask yourself, what would happen if one spouse died? Who are the heirs … the second spouse, the children from the first marriage, a combination of both of them? How much to each and when? What’s fair?
Too often the Will is vague, the decedent’s intentions are unclear, and the survivors all have expectations. It should come as no surprise that estate litigation cases are on the rise, and once filed, the gloves come off. Though a prenuptial agreement would have been helpful, even without such an agreement, a well designed estate plan could provide equitably for children from a prior marriage and a subsequent spouse. The amount left to each, the timing of the distributions, and the estate tax implications require thoughtful consideration of the following factors:
- The financial needs of the children and the second spouse;
- The ages of the children and the age of the spouse;
- The estate tax implications of leaving money to a spouse or children;
- The terms of a prenuptial agreement;
- The length of the marriage and whether children were born to the marriage;
- The relationship between the parent and the children from a prior marriage;
- The need to hold the assets in a spousal trust or distribute outright to spouse and the need to hold assets in a discretionary trust or age terminating trust for children or distribute outright;
- The titling of assets to make sure they are consistent with the terms of the Will;
- The health of spouse and children; and
- Their respective abilities to manage money
If an estate plan is created by an attorney who balances these needs such that the plan provides reasonably for each beneficiary class, then the likelihood of adequately protecting both your loved ones and your legacy goes up. But if the Will is silent as to any class, as it was with Anna Nicole Smith, or harsh as to any one beneficiary, then the likelihood of probate litigation goes up – dramatically.
Legacy Lesson # 7: Disinheriting a Family Member
If J. Howard Marshall II truly intended on cutting his young bride out of his estate, he should have taken a page from Sanford Babbitt’s playbook. In the movie Rain Man, Tom Cruise plays a fast and loose son who at age 16, fell out of favor with his father. After his father’s demise, the family lawyer read aloud the following terms of a letter which was attached to the Will:
AU: Per Legal’s instructions, movie quotes don’t require permission up to about 300 words – this needs to be trimmed a bit. I’d summarize some of the dialogue at the end… – Emilie
‘And I remember, too, the day you left home…
so full of bitterness and grandiose ideas.
So full of yourself.
And being raised without a mother, the hardness of your heart…
is understandable as well.
Your refusal to even pretend that you loved or respected me…
all these I forgive.
But your failure to write, to telephone, to reenter my Life in any way…
has left me without a son.
I wish you all I ever wanted for you. I wish you the best.’
Then turning to the Will, the Lawyer continued reading:
‘l hereby bequeath to my son, Charles Sanford Babbitt…
that certain Buick convertible…
the very car that, unfortunately, brought our relationship to an end.
Also, outright title to my prizewinning hybrid rose bushes.
May they remind him of the value of excellence…
and the possibility of perfection.
As for my home and all other property, real and personal…
these shall be placed in trust in accordance with the terms of…
that certain instrument executed concurrently herewith.’
Charlie Babbitt then asks: “What does that mean?”
Family Lawyer responds: “It means that the estate, in excess $3 million… after expenses and taxes, will go into a trust fund… for a beneficiary to be named in this document.”
Charlie Babbitt: “Who is that?”
Family Lawyer: “I’m afraid I can’t tell you that.”
Charlie Babbitt: “Who controls the money? You?”
Family Lawyer: “No. He’s called a trustee.”
Charlie Babbitt: “What is that? How does that work?”
Family Lawyer: “Forgive me, but there’s nothing more I can say. I’m sorry, son. I can see that you’re disappointed.”
Charlie Babbitt: “Why should I be disappointed? I got rose bushes, didn’t I? What’s his name got–What’d you call him? The– – Beneficiary? He got $3 million, but he didn’t get the rose bushes. I definitely got the rose bushes.”
Family Lawyer: “Charles, I mean, those are rose bushes. There’s no need —”
Charlie Babbitt: “To what? To be upset? To be upset? If there is a hell, sir, my father’s in it…and he is looking up right now and he is laughing his ass off. Sanford Babbitt. You wanna be that guy’s son for five minutes?
Family Lawyer: “Were you Listening to that letter?”
Charlie Babbitt: “Yes, sir, I was.”
Family Lawyer: “Were you?”
Charlie Babbitt: “No. Could you repeat it? ‘Cause I can’t believe my fuckin’ ears.
(Charlie then leaves the room stunned and sees his beautiful girlfriend.)
Girlfriend: “I was looking for you. How did it go?”
Charlie Babbitt: “I got what I expected.”
Sometimes a child has chosen not to be part of their family, or has been a thorn in the side of his or her parents for too long, has shown no love or respect, is simply out of favor. Or as is often the case, a child has married a spouse who is not up to snuff or appears to be the cause of divide. Though a child does not by law have rights to inherit the riches of their parents, simply omitting the child from a Will is a mistake. Such an omission may leave the omitted child nothing to lose and all to gain by contesting the Will. Why? Because a Will contest burdens the other surviving beneficiaries and the Estate with the costs associated with litigation, will cause the Executor or Administrator to delay distributions to the heirs until the litigation is concluded and will increase the tensions and anxieties for those who now need to fight the omitted child. Even if the omitted child has weak case, the prospect of a long and costly litigation could force a settlement, particularly if the other heirs have no stomach to battle or resources to fund the war.
Simply omitting a child from your Will, or providing the sum of $1 is not prudent planning. The better course of action is to name the child in the Will and specifically address why the child is not to be included as a beneficiary. The goal is to let all who read the Will, including potentially a Judge, know that your decision was deliberate and intentional. Sometimes, in addition to the language in the Will, a handwritten letter is helpful if it details your reasoning as it could be introduced into evidence and quickly quash the Antagonists’ ill conceived efforts.
For those who have meaningful assets, it may be prudent to include a modest bequest for the child, but not include him or her in the residuary or balance or the estate. In addition to the bequest, the inclusion of a no contest clause, or in terrorum clause, adds teeth and gives the Antagonist cause for concern. This clause provides that in the event any beneficiary contests the Will, their interest lapses and is distributable to the residuary beneficiaries. Even the most adversarial beneficiary would think twice before contesting the Will, for to do so would put their bequest at risk. The combination of language specifically omitting the beneficiary from the residuary, providing a small but not inconsequential fixed bequest, an in terrorum clause, and possibly a handwritten letter of explanation and a video taped Will signing, all but disarm the Antagonist from contesting a Will.
Just ask Charlie Babbitt.
Russell J. Fishkind, Esq. and Ronald P. Colicchio, Esq. at Saul Ewing, LLP firstname.lastname@example.org (609)452-5043 email@example.com (609)452-3133