December 19, 2009 by Matt House
As we are in the midst of the holiday season and families all around the world are coming together to enjoy each other’s company for a few fun-filled days (or in some cases a couple of miserable hours), it can be a little disheartening to read about (much less write about) another wealth war in the news. However, this one is pretty spicy, has a celebrity aspect to it (Barbara Walters and Henry Kissinger were witnesses at the underlying trial), and even has some criminal twists and turns.
Specifically, msnbc.com had an article today which contains one of the more extreme examples of an estate and trust battle. I was vaguely familiar with Brooke Astor, or rather her last name due to her philanthropy, but became much more interested after hearing and reading of the unfortunate last few years of her life in which she was apparently taken advantage of by her only child. Mrs. Astor’s third husband, Vincent Astor, was a descendant of John Jacob Astor, whose fortune was accumulated in fur trading and real estate. Mr. Astor was one of the first multimillionaires, and Mrs. Astor ultimately gave away almost $200 million to institutions and was given a Presidential Medal of Freedom for her generosity. She passed away in 2007 with many more tens of millions in her portfolio.
According to the msnbc.com article, Anthony Marshall, Mrs. Astor’s son, apparently led a successful, well-regarded life until one of his own sons, Phillip Marshall, exposed his father’s apparent abuse of his mother (Phillip’s grandmother) and her wealth in the course of a 2006 civil suit. The stealing of her fortune was evidently so bad that the 85 year old Marshall actually was convicted of crimes a couple of months ago after a 5 month long trial and now faces sentencing next week, along with an estate lawyer who was likewise convicted of shenanigans associated with Mrs. Astor’s fortune. The case is rather intriguing given the fact that celebrities such as Whoopi Goldberg and Al Roker have come to his defense and pleaded for leniency from the sentencing judge. Only time will tell whether he actually receives it, as there were tales told at trial of Papa Marshall engaging in gamesmanship with respect to Mrs. Astor’s will so as to benefit him over her favorite charities, stealing her artwork, and giving himself a million dollar raise for his efforts in managing her wealth.
As a lawyer who has previously worked on many white collar criminal defense matters, I speak from some experience in stating that white collar crime is pretty rarely prosecuted. The public seems to be more taken aback by crimes of drugs, sex, and violence, and therefore the politicians and the strapped resources of governmental officials are largely dedicated to prosecuting those types of crimes. White collar crimes are also typically complex, document-intensive, and often go uncovered much less unprosecuted.
The Astor/Marshall case, however, is one instance in which the facts and circumstances can occasionally be so bad that they warrant more than a civil suit and instead the intervention of criminal investigators. I do not know why, for instance, stealing $100,000 from a relative by altering some documents is any less of a prosecutable crime than stealing a carton of cigarettes from a convenience store, but for some reason it seems like the latter is much more likely to receive the attention of the law enforcement authorities. In any event, the Astor/Marshall case contains lessons for lawyers and wealthy individuals alike in ensuring that the estate planning and trust administration processes are as free of hanky-panky as possible.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Breach of fiduciary duties, Duties of executors, Duties of trustees, In the news, Misappropriation of assets, Self-dealing | Tagged estate planning, Astor, Brooke Astor, wealthy, trust administration, Phillip Marshall, Anthony Marshall, law enforcement, white collar crime | Leave a Comment »
December 12, 2009 by Matt House
Earlier this month the Arkansas Court of Appeals ruled in an appeal from the Crawford County Circuit Court that the trial judge did not err in denying a motion to dismiss and finding that the statutory formalities for execution of a will had been satisfied. Specifically, in Baxter v. Peters, No. CA 09-594, a dispute arose between the executor of the grandmother’s estate and the grandchildren. The grandmother apparently left nominal gifts of money to the grandchildren and the bulk of her estate to the National Cemetery in Fort Smith, Arkansas. Presumably the grandchildren were hoping for a larger inheritance if the will in question was not deemed to be valid, and in any event a will contest followed.
At trial the probate court heard conflicting testimony on the issue of whether the will was witnessed with the appropriate number of witnesses (the parties did appear to stipulate that the will in question was in fact signed by the grandmother). Questions had been raised since the attorney who prepared the will had apparently been in the habit of sometimes not calling in all of the witnesses when the will was being signed (the attorney’s own son, for example, evidently testified that he practiced law with his father for a few years and that occasionally witnesses would sign wills outside the presence of the testator). Ultimately however, the trial court concluded that the signing of the will had been proven according to the stautory formalities.
While the case is not groundbreaking in the sense that it creates a new rule of law, it is nevertheless instructive because it serves as a careful reminder that testators and their attorneys should be extra careful to ensure that all of the prerequisites for signing a will have been followed (e.g., the will should be in writing, actually signed in front of witnesses, and witnesses should also sign in front of the testator and at their request, etc.). The fact is that circumstances surrounding the signing of wills and trusts can often be suspect, and those who get sloppy about complying with the statutory requirements are proceeding at their peril as—many years later—estate, trust and probate litigation can ensue long after their deaths.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Recent Arkansas appeals, Will contests | Tagged appeal, Arkansas Supreme Court, Crawford County, will contest | Leave a Comment »
December 8, 2009 by Matt House
You may remember a movie from 15 or so years ago called “My Life,” starring Michael Keaton and Nicole Kidman, in which a terminally ill man films a video for his unborn child to watch after the man passes away after a fight with cancer. The father essentially wanted the child to know who the father was and what the father had learned in his own life, since he would not be around when the child was growing up.
While the movie was not focused upon an estate or trust battle, I was still reminded of “My Life” yesterday when reading the December 7, 2009 post on the Wills, Trusts & Estates Prof Blog, which had an interesting link to a December 3, 2009 Wall Street Journal article written by Kristen McNamara and entitled “Lights, Camera . . . Last Words.” The article discussed videos as a way of allowing the dying to say a few last words and also possibly prevent legal disputes regarding property division after death. Here is an excerpt from the Blog and the article itself:
“Some individuals have found a way to breathe life into dry estate-planning documents: They’re supplementing them with personal messages via video.
With guidance—and caveats—from attorneys and financial advisers, some elderly and terminally ill individuals, and even some young parents, are picking up video cameras or hiring professional videographers to share their life stories, express hopes for younger generations and explain why they’re leaving certain assets to certain family members. * * *
[E]xperts say that while videos can head off disputes, if not carefully executed, they also can backfire. * * *
A video may make sense if you are concerned that an heir will claim you weren’t competent when you signed estate-planning documents or were pressured to distribute your assets a certain way, estate-planning attorneys say. Videos in which lucid individuals review their wills with their attorneys and answer questions that demonstrate their understanding of the documents and confirm they weren’t coerced into any decisions can be useful in rebuffing challenges, they say. Such videos are typically filmed during a will-signing in an attorney’s office and are kept by the attorney, along with the estate-planning documents. * * *
Attorneys generally caution against homemade videos, saying they are more likely to cause problems than those produced in consultation with an attorney. A video filmed by a beneficiary, for example, could give rise to conflict-of-interest questions. And, whether filmed professionally or not, a video in which a person looks ill or uneasy could raise questions about his or her cognitive abilities.”
My personal view on this is that—overall—technology is a good thing and if it can be used to help rather than hinder in the course of estate planning, then it should be considered as part of the process. After all, there is little doubt in the criminal context that many a disputed traffic stop, questioned search and seizure, and controversial police station interrogation could be averted if such proceedings were videotaped to ward off the “he said, she said” nature of these events. Likewise, it seems that if an individual had a video camera and (vis-a-vis an objective, detached cameraman) proceeded to film a will or trust signing ceremony, held up each page of the document to the camera, interviewed or showed the witnesses and other participants, videotaped the actual signatures and notarizations, and otherwise allowed the individual to talk at length during the proceeding, that this could conceivably preclude many a disputed proceeding involving fraud, undue influence, and the like.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in In the news, Interpretation of wills/trusts, Will contests | Tagged beneficiary, conflict of interest, estate, estate planning, Michael Keaton, My Life, Nicole Kidman, trust, Wall Street Journal, will | Leave a Comment »
December 3, 2009 by Matt House
The estate, trust, and probate disputes and lawsuits that one reads about in the newspapers and which we commonly see in our law practice can seem like a television or movie drama. Common threads running through these battles frequently include prominent characters in the community, tales of large sums of money flying around, allegations of complex conspiracies, questions regarding how a person died, disputes about the execution of certain documents, and claims of fraud and other wrongdoing. In fact, these are probably the same human elements and reasons why I tend to find this area of law so interesting. Perhaps it is also the reason why a new book and television series are coming out relating to these estate, trust and probate battles.
Specifically, two Michigan lawyers, Andrew and Danielle Mayoras (who also author the Probate Lawyer Blog) have written Trial & Heirs: Famous Fortune Fights which is described as a book containing “juicy details on famous cases.” While giving the reader “a front row seat in the courtroom,” the authors also seek to “replay the scenarios and point out what went wrong, the winners and losers, and what you can learn from it.” The book is available for puchase at the above link.
Also, the December 2, 2009 entry on the Wills, Trusts & Estates Prof Blog reports that a Canadian-based TV production company is shooting a new documentary series entitled “The Will,” which will apparently reveal “the true life stories of complex and surprising disputes that have arisen surrounding a wiill, estate or trust.” The link summarizes how to participate in the series or submit a case that you think they should profile, and states that “they are looking for dramatic, unusual stories with numerous twists and turns, secrets and real emotion.” Most estate, trust and probate battles that we have handled seem to meet that criteria, but apparently one condition for being profiled in the TV series is that the cases must have reached a final decision or settlement in order to be considered.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Breach of fiduciary duties, In the news, Misappropriation of assets, Rights of beneficiaries, Will contests | Tagged book, conspiracy, documents, estate, fortune, fraud, lawsuit, money, movie, probate, prominent, television, Trial And Heirs, trust, TV | Leave a Comment »
November 30, 2009 by Matt House
Since one of my areas of practice is estate, trust & probate litigation, it is obviously not in my economic self-interest to counsel against getting involved in this type of litigation in the first place. However, first and foremost is a lawyer’s duty to his or her client, which while sometimes involves filing or defending a lawsuit can also mean trying to avoid that lawsuit altogether. After all, Abraham Lincoln once advised: ”Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser—in fees, expenses and waste of time.” That is still generally solid advice, although sometimes the fight just cannot be avoided.
That said, U.S. News published a good little article over the Thanksgiving holiday entitled “8 Tips To Avoid Nasty Estate Surprises” which provides some good pointers for avoiding estate, trust & probate litigation. In summary:
1. Pick a a reputable, experienced lawyer who has not performed any work for any of the other beneficiaries. Basically, you want an attorney who knows what they are doing in this area, who does not have a conflict of interest, and who will be representing your interests (only).
2. Pick an administrator who can get along with the family, maybe even a professional fiduciary (like a bank trust department) if no one else could practically fill this role. This is a biggie—oftentimes when one beneficiary is chosen to act as executor or trustee it can cause consternation with respect to the other beneficiaries.
3. Talk about your intentions with family members before any will or trust is drafted, in order to preclude surprises and fights after death and making everyone aware of your plans and desires. Open, honest communication can go a long way toward heading off battles over the family fortune.
4. Consider your state’s laws and create trusts if necessary to bypass probate if it is particularly burdensome under applicable state law. Again, our law firm engages in estate, trust & probate litigation—not estate planning—however we can refer you to some reputable attorneys in this area if needed.
5. Update the will or trust often so that challenges are less likely. One of the best ways to avoid litigation is to occasionally update your documents—under facts and circumstances (lots of objective, detached witnesses, etc.) demonstrating the absence of fraud and undue influence from others—so that it can be demonstrated you were polishing your estate and trust objectives up until the end your life.
6. Be sure to title your assets propertly so that the assets pass through or outside of probate as you originally intended. Too many folks spend a lot of money creating fancy trusts and then never do the relatively simple work of actually transferring assets into the trust.
7. Think about including a no-contest clause tied to testamentary gifts of a degree sufficient to discourage legal disputes. To help avoid post-death disputes it is worth possibly including a penalty clause that essentially poses a risk of losing their piece of the pie for any beneficiary who challenges the instrument in question after your death.
8. Consider allowing some discretion with respect to distribution of assets so that beneficiaries can agree to a distribution that best meets their own needs and desires. There is no one-size-fits-all strategy and of course none of us have a crystal ball, so sometimes providing for some flexibility is often a good practical solution.
While not a fool-proof plan to avoid estate, trust & probate litigation, the foregoing reflects some good first steps to staying out of the courts with respect to the family fortune. As we are in the heart of the Thanksgiving and Christmas seasons, I extend my best wishes to you with hopes for a fuss-free next few weeks.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Accounting actions, Breach of fiduciary duties, Duties of executors, Duties of trustees, In the news, Interpretation of wills/trusts, Misappropriation of assets, Rights of beneficiaries, Self-dealing, Will contests | Tagged Abraham Lincoln, beneficiaries, bypass, distribution, estate litigation, estate planning, fraud, intentions, no-contest, probate litigation, surprise, trust department, trust litigation, trusts, U.S. News, undue influence | Leave a Comment »
November 11, 2009 by Matt House
At my house we just started giving allowances to our kids so long as they do certain chores around the house, and hopefully the experiment will teach them a number of lessons including personal responsibility, teamwork, the value of hard work, budgeting, saving, etc. Each of our children will receive one dollar (per year of their age) per week, i.e., our 7 year old will receive $7 per week so long as he does his chores every day (and is docked a buck if he doesn’t get them done). I am hopeful that this will work, but the jury is still out as they have not yet caught on, for example, to the requisite bedmaking every morning.
That allowance, of course, is a mere pittance to the allowance that Michael Jackson’s father is claiming from his son’s estate. I wrote about Michael’s death a few weeks ago, and sure enough it appears that there are some post-funeral disputes with respect to who will benefit from the assets in his estate. Specifically, an article today reveals that the gloved one’s controversial father, Joe Jackson, recently filed a 60-page motion seeking a $15,000 monthly allowance to help cover his expenses. Apparently Mr. Jackson’s only income other than his son’s assistance has been a $1,700 monthly Social Security check. His alleged monthly expenses evidently include $1,200 for rent for his Las Vegas home (his wife of 50 years lives north of Los Angeles), $2,500 for eating out, $1,000 for entertainment, gifts and vacations; $2,000 for air travel; and $3,000 on hotels. That actually does not sound too unreasonable considering Vegas prices, separate and distinct from the issue of whether Mr. Jackson should receive a dime to begin with . . .
Anyway, a judge has ruled that Mr. Jackson can pursue his motion to receive a family allowance from the estate because he claimed his son had long been supporting him, but simultaneously ruled that he will not inherit any of his famous son’s assets because he was not named in the will. Mr. Jackson was deemed not to have standing to pursue his litigation, and therefore also will not be able to challenge the appointment of the executors chosen by the singer to handle the administration of his estate. There is some indication from the article that an appeal may be forthcoming, but given the well-publicized strained relationship that Michael and Joe Jackson have had in the past it seems unlikely that an appellate court would overrule the trial judge’s factual findings as to Michael’s intent in drafting his will.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Duties of executors, In the news, Interpretation of wills/trusts, Rights of beneficiaries | Tagged allowance, challenge, children, control, duties, estate litigation, executor, litigation, michael jackson, probate litigation, will | Leave a Comment »
October 28, 2009 by Matt House
An interesting article on msnbc.com from a few days ago sheds light on how modern day estate planning probably needs to catch up with the practicalities of modern day life. Specifically, the article’s author discusses how, years ago, when an individual died the survivors typically conducted a search of the house, papers, safety deposit box, etc. in order to determine and collect information and records regarding the assets and liabilities of the estate. However, these days much of that type of information is not stored in “hard copy” form but rather on a computer, typically protected by a password and known only to the person who just passed away. One never knows when they will breathe their last breath, of course, and often the decedent never shares their password with another family member, friend, or trusted legal or financial advisor.
As a lawyer who does not engage in estate planning but instead represents clients in estate, trust and probate litigation matters, I believe that the increasing use of digital recordkeeping is fraught with potential abuse. Specifically, while most fiduciaries are honest and trustworthy, I have worked on many lawsuits in which shady estate and trust administrators are alleged to have destroyed, concealed, or otherwise failed to produce documents to beneficiaries. When such records are never even printed out but rather are kept only in digital form, the beneficiaries’ discovery of such matters can seemingly be made even more difficult if not impossible. After all, in some ways it can be easier to manipulate digital data than a hard copy. So, while computers can no doubt increase the efficiency and accuracy of diligent decedents and honest estate and trust administrators, it basically comes down (as it always does) to a universal truth—people who are inclined to cheat can probably find a way to do it.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Breach of fiduciary duties, Duties of executors, Duties of trustees, In the news, Misappropriation of assets, Rights of beneficiaries, Self-dealing | Tagged administrator, assets, computer, digital, estate planning, lawsuit, liabilities, recordkeeping | Leave a Comment »
October 28, 2009 by Matt House
More times than I can count since I started practicing law, I have been involved in lawsuits in which the authenticity of a signature on a document was a primary disputed issue in the case. Whether our law firm was representing the plaintiff who was suspicious of a signed document, or instead representing the defendant who was insisting upon the validity of a signed document, many of these situations entailed questions over how and/or when a notary public witnessed a person’s signature. The types of documents involved (e.g., wills, trusts, deeds, contracts, etc.) is as varied as the types of alleged misconduct (e.g., never actually witnessing the signature, backdating a document, failing to properly identify a signer, willfully stating as true a material fact known to be false, etc.). Make no mistake—there are laws governing notaries and their actions, but for some reason often many notaries can get somewhat loosey-goosey regarding their obligation to strictly follow the letter of the law.
In any event, on October 22, 2009, the Arkansas Supreme Court intervened in such a dispute and reversed a trial court’s ruling that a power of attorney transferring real property was valid. In Jones v. Owen, 2009 Ark. 505, an appeal from Sebastian County Circuit Court, the Court considered a case involving disputed land, a father’s will, and that father’s power of attorney. You can guess what happened, of course . . . the will said that the land went to X while the power of attorney ultimately resulted in the land being conveyed to Y. Litigation ensued and the trial court ruled that the power of attorney was valid.
In overturning that decision, the Arkansas Supreme Court concluded that the power of attorney was not valid and did not authorize the property to be transferred. Specifically, in this instance the power of attorney was apparently acknowledged by a notary public prior to the decedent ever signing it. That is, the notary public had signed the acknowledgment and left the date blank, which was later filled in by the attorney handling the transaction. The Court ruled that in some circumstances a signature could be notarized without the notary public physically being there to witness the signature (e.g., after signing a grantor can appear before a notary and acknowledge his signature, a grantor can acknowledge his signature via a telephone call with the notary, etc.). However, if the grantor never appears to acknowledge his signature, but the notary falsely certifies that the grantor did appear, then the acknowledgement will be deemed void.
Moral of the story: Notaries have a tremendous amount of power, as they add a significant measure of validity to the execution of documents which record major financial transactions and carry out a person’s final wishes regarding their property. Those powers should not be exercised carelessly, much less fraudulently. Jones v. Owen appears to be a clear message from the Court that it will require notaries to strictly comply with their legal duties, and that the Court will not hesitate to set aside transactions when warranted under the facts and circumstances.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Powers of attorney, Recent Arkansas appeals, Rights of beneficiaries | Tagged arkansas appeal, notaries, notary public, power of attorney, signature, will | Leave a Comment »
October 24, 2009 by Matt House
Anyone who knows me is aware of my admiration for Dr. Martin Luther King, Jr. as a speaker, preacher, writer, community activist, and proponent of peace and nonviolence. Many do not appreciate the fact that he was much bigger than a mere advocate for racial equality, but rather was a warrior for the larger causes of social and economic justice. In light of the controversies over his writings and his personal life, he was undoubtedly a flawed figure (aren’t we all?) but his legacy and contributions to society are undeniable.
This is precisely why the battle over Dr. King’s estate in which his children have recently been involved has been such a tragedy and—I dare say—an embarrassment. I cannot help but think that, with so far to go in terms of achieving just societies and just economies, if he were alive today Dr. King would be sick to know that his children are not so much fighting to carry on his legacy as they are fighting with each other about the assets and property rights in Dr. King’s estate.
That is why it was so refreshing to see that a few days ago the King children evidently decided to resolve their differences and settle their pending litigation with each other. Specifically, Dexter King’s brother and sister sued him alleging that he engaged in improprieties while he was acting as head of Dr. King’s estate, and the parties were on the verge of a civil jury trial which would no doubt have aired the King family’s finances and any dirty laundry. Estate, trust and probate battles often unfortunately result in families being completely torn apart, but it appears (from the article at least) that the King siblings are hopeful that they can forgive and reconcile their differences. This is the exception rather than the rule in such circumstances, but is a development of which Dr. King would no doubt be proud.
Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.
Posted in Breach of fiduciary duties, Duties of executors, In the news, Misappropriation of assets, Rights of beneficiaries | Tagged assets, children, estate litigation, executor, jury trial, Martin Luther King, property rights, siblings | Leave a Comment »
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