Families Of Deceased Celebrities Have Wealth Wars Too

Rich celebrities---who one might assume would have sophisticated, ironclad estate planning documents in place to avoid estate disputes and facilitate post-death transfers of assets to their desired beneficiaries---are not immune from wealth wars.  Rather, even the families of famous musicians, actors, etc. occasionally engage in years-long battles over their deceased loved one’s money and property.  For example, below are 8 randomly-selected celebrity inheritance disputes:

1.  Prince:  The purple-loving musician died without a will in 2016, leaving 6 half-siblings but no spouse or living children.  A 6-year long legal battle, apparently with thousands of Court filings, resulted among his heirs (ultimately settling) over his $156 million estate because they could not agree how to manage the estate moving forward.

2.  Stan Lee:  After the Marvel Comic Books co-creator's death in 2018, his daughter J.C. Lee and other parties engaged in a 4-year battle over his estate, worth around $50 million.  She was accused of intellectual property theft and elder abuse, while Stan’s former business partners were accused of exploiting him for financial gain.

3.  Aretha Franklin:  After the legendary singer's death in 2018, she left an estate estimated to be worth about $80 million.  In the months that followed her death, numerous wills were discovered---some of them handwritten, some of them found under couch cushions, and all of them contradictory in parts---which resulted in confusion and years of litigation over who her intended beneficiaries really were. 

4.  James Brown:  The iconic singer's estate was involved in a 15-year long legal battle after his death in 2006.  He left a will naming numerous beneficiaries---including children, grandchildren, and charities---but various other claims were made by other alleged children and relatives leading to multiple lawsuits that were ultimately resolved in 2021.

5.  Whitney Houston:  After the acclaimed singer's death in 2012, her daughter, Bobbi Kristina Brown, inherited her estate and was her sole beneficiary according to a 1993 will.  However, Bobbi Kristina died in 2015, just 3 years after Whitney, resulting in a legal dispute among multiple people scrambling over who would inherit the assets:  Bobbi Kristina’s father (bad boy Bobby Brown); her maternal grandmother, Cissy Houston; Whitney’s brothers; and even Bobbi Kristina’s boyfriend at the time, Nick Gordon (later found civilly liable for her death in 2016, and in turn he later died of a drug overdose in 2020).

6.  Michael Jackson:  After the singer's untimely death in 2009, his estate became involved in multiple legal battles, including disputes between his family and the estate's executors over control of his assets (estimated to be hundreds of millions of dollars at a minimum) and a lawsuit filed by Quincy Jones for unpaid producer royalties.  His mother and 3 children were the beneficiaries of his estate, and the primary dispute was one in which his will was alleged to be fraudulent and not properly executed, claims ultimately rejected by the Courts.

7.  Robin Williams:  Following the actor's 2014 death from suicide, his widowed 3rd wife and his children from previous marriages were involved in a legal dispute over the interpretation of his estate planning documents.  The case ultimately settled, with both sides accusing the other of “greed,” and is a Hollywood example of one of the most common scenarios in estate and trust litigation, i.e., the children of the deceased locking horns with a subsequent spouse of the deceased. 

8.  Philip Seymour Hoffman:  After the actor's death in 2014 from a drug overdose, his estate was embroiled in legal battles involving will contests and disputes over the rights of his estate.  While understandably not wanting to leave behind “trust fund kids” without incentive to work, he left a will naming his girlfriend as sole beneficiary of his estate, trusting that she would purportedly provide for his children.  He also failed to have sound estate planning in place, subjecting his assets to millions of dollars of otherwise avoidable taxes.

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, House, Swann & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Estate And Trust Litigation’s Resemblance To Family Law: “Divorces On Steroids”

Estate and trust litigation, and family law, may seem like two distinct areas of law, but in truth they share some significant similarities and parallels---perhaps that is why at least 75% of my clients and cases fall in these two legal fields.  Separate and distinct from the basic fact that they often involve family members fighting about money and property, below are a few key areas where the two areas overlap:

1.     Emotional Complexity

Both family law, and estate and trust litigation, frequently involve complex and emotionally-charged situations.  In family law, for instance, divorce, child custody, and child or spousal support issues can provoke strong feelings from all parties involved.  In estate and trust litigation, family members may likewise have passionate emotions when dealing with the death of a loved one or the distribution of an inheritance.  

Probably the two most common scenarios that I see in estate and trust litigation are (a) sibling disputes between brothers and sisters and (b) a deceased person’s children of the first marriage having disagreements with a subsequent spouse of the deceased person.  In both areas of law, it is important to understand the emotional complexity of the situation and work to find solutions that are fair and practical.

2.     Mediation And Alternative Dispute Resolution

Mediation, arbitration, and alternative dispute resolution (ADR) are increasingly popular methods for resolving conflicts in both family law and estate and trust litigation.  Mediation can help parties come to a mutually beneficial agreement without the need for a lengthy court battle.  In both areas of law, mediation and arbitration (submission of a dispute to a private party who resolves the dispute by making a binding decision) can sometimes be faster, less expensive, and less adversarial than traditional litigation.

3.     Legal Documentation

Both family law, and estate and trust litigation, often involve detailed documents and disputes that result from interpretation or violation of the terms of those documents.  In family law, this may include documents such as prenuptial agreements, postnuptial agreements, custody agreements, and divorce settlements.  In estate and trust litigation, such documents may include wills, trusts, and powers of attorney.

4.     Family Dynamics

In both family law, and estate and trust litigation, it is important to understand family dynamics and how they may impact legal proceedings.  In family law, the relationships between parties (certainly divorcing parties, but often children or grandparents as well) may be strained or contentious, which can make communication and cooperation very challenging.  In estate and trust litigation, the distribution of money and property may lead to tension among family members who have different ideas about how assets should be distributed or what the deceased person truly intended.  Occasionally the disputes are not even really about the money and property, but rather about jealousy or unresolved grudges and arguments going back years or decades.

5.     Advocacy

Family law, and estate and trust litigation, require skilled advocates to help parties navigate the courts and find fair solutions.  Occasionally there is no settlement between the parties and a third party (judge, jury, arbitrator, etc.) must become involved to conclusively resolve the dispute for them, which can be both risky and expensive.

Regardless, attorneys in both areas of law must understand the complex nuances of the law and be able to effectively communicate with clients and other parties involved in the case. They must also be able to advocate for their clients and help them achieve their desired outcomes while keeping in mind the emotional complexity and family dynamics involved.

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, House, Swann & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Avoiding Estate, Trust, Probate & Inheritance Litigation?

As one who largely makes his living assisting fiduciaries and beneficiaries in disputes arising out of the contested disposition of a deceased person's money and property, it is probably not in my personal economic interest to dispense advice on how to avoid estate, trust, probate & inheritance litigation.  After all, such litigation is how I pay the bills and put food on the table.

However, first and foremost as an attorney I am in the business of trying to help people with their legal problems.  I am therefore reminded of what President Abraham Lincoln, a former lawyer himself, once said:  "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.  As a peacemaker the lawyer has a superior opportunity of being a good man.  There will still be business enough."

With that admonition in mind, in researching an issue lately I came across the following linked article written by a Texas lawyer and published a few years ago by the American Bar Association:  "A Message To Clients:  Avoiding Probate Court Litigation."   It contains a good summary of situations which are susceptible to these types of disputes (dysfunctional families, subsequent marriages, sloppy or stale estate planning,  etc.).  It also includes solid suggestions for proactively preventing such disputes from arising in the first place.  

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Petitions For Instructions And Declarations Of Rights---Not All Trust Litigation Is Necessarily Nasty

Frequently trust litigation stems from a heated dispute between trustees and beneficiaries, or co-trustees who cannot agree on the trust administration, or beneficiaries who cannot agree on their respective rights under a trust instrument, or other disagreements between various parties incident to a trust.  When such disputes cannot be resolved amicably by the parties themselves, with or without the assistance of legal counsel, sometimes the only practical recourse is to file suit and let a judge or jury decide who should prevail depending upon the facts,  circumstances and evidence. 

With this in mind, Ark. Code Ann. § 28-73-201(b)  does not mandate continuing court supervision of trusts.  Rather, a court may intervene in the administration of a trust whenever it is asked to by an “interested person or as provided by law.”  Ark. Code Ann. § 28-73-201(a).  Such judicial proceedings involving a trust “may relate to any matter involving the trust’s administration, including a request for instructions and an action to declare rights.”  Ark. Code Ann. § 28-73-201(c) (emphasis added). 

In sum, occasionally trust-related judicial proceedings do not involve an alleged breach of trust, breach of fiduciary duty, misappropriation of assets, etc.  That's a good thing because such disputes---often involving family members fighting over money---can turn into some of the ugliest and most contentious wealth wars imaginable. 

Rather, petitions for instructions and requests for declaratory judgments---such as the ones contemplated in Ark. Code Ann. § 28-73-201(c)---are typically less heated because theoretically they involve an innocuous request that the court merely provide instructions or guidance to the trustee or beneficiaries. Perhaps the proceeding stems from an alleged ambiguity in the trust terms, maybe there is a question regarding which beneficiaries are supposed to receive trust income or principal, or possibly the court is simply being asked to declare the rights and obligations of various individuals associated with the trust.  

While these matters can still be adversarial in nature, they are usually not the classic battles in which someone is claiming that another party necessarily engaged in intentional fraud or other wrongdoing.  Accordingly, when appropriate this type of proceeding should be considered as an option whenever there is a need for court intervention in a situation which does not necessarily rise to the level of a full-blown  "divorce on steroids," as we sometimes call the nastiest of the inheritance-related disputes in which we are frequently asked to become involved. 

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Understanding Estate, Trust, Probate And Inheritance Litigation In Terms Of "Pie"

I love pie, and it's probably my favorite type of dessert.  I have fond childhood memories of my Grandmother making fantastic butterscotch meringue pies whenever we would travel to her house back when I grew up in Oklahoma.  Every Fall I look forward to eating pecan pie, and I can cook a pretty good one using a recipe and method that I read about in Southern Living magazine many years ago.  In my opinion, cakes, cookies and other desserts pale in comparison to a big slice of pie accompanied by a big scoop of Blue Bell ice cream (or Arkansas-based Yarnell's).  

That said, I find that when talking to clients it is often helpful to explain estate, trust, probate and inheritance litigation and disputes  in terms of "pie."  For example, sometimes the question is "who gets a piece of the pie?"  There could be a conflict   about who the beneficiaries are in a will or trust.  Or, if there was not a will or trust a Court could need to determine who the deceased's heirs are for purposes of intestate succession.  If a will or trust sought to exclude someone and they challenge it, the enforcement or non-enforcement of that term could dictate whether or not they get a piece of the pie at all.

Sometimes the issue revolves around "how big a slice does everyone get?"  For example, a will or trust often leaves different types or percentages of property to different people or entities.  In an intestate estate where the deceased did not leave a will or trust (or perhaps those documents were found to be invalid), one's status as a surviving spouse, surviving child, surviving parent, surviving sibling, surviving grandchild, etc. will determine the size and extent of one's piece of the pie.

Other times the question involves "what is even in the pie?"  What I mean by  that is that property formally conveyed to a trust should pass through the trust, but property not conveyed to that trust will pass outside the trust (typically through the estate).  Likewise, whether or not an estate is formally opened or a trust even exists, some property can automatically pass by beneficiary designations (IRA's, life insurance, etc.) or operation of law (transfer on death accounts, joint tenants with right of   survivorship accounts, etc.) instead of passing to or through a trust, estate, etc.  

Finally, occasionally the concern focuses upon "whether anyone ate some (or all) of the pie before it got sliced  up?"  In other words, if there was a misappropriation of monies or assets the dispute may necessarily be primarily concerned with (1) attempting to investigate, locate and recover the missing property, and (2) holding whomever took it civilly or criminally responsible, if appropriate.  

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Presentation At The 2016 Arkansas Bar Association Annual Meeting

Today one of my law partners, Pat James, and I will be privileged to make a presentation at the Arkansas Bar Association Annual Meeting in Hot Springs, Arkansas, where over 1,200 lawyers and judges congregate every June for 4 days of continuing education seminars,  meetings, and socializing.   The title of our presentation is---not surprisingly given that you are reading this blog---"WEALTH WARS:   Arkansas  Estate, Trust, Probate And Inheritance Litigation."

The hour-long presentation is designed to be a broad overview, for the general practitioner, of numerous topics arising in this area of law.   For an A to Z listing of the topics to be discussed, inclusive of some written materials containing a checklist of common claims and causes of action; a checklist of common defenses; an exemplary case theme (the “fraud triangle”); a lengthy list of Arkansas statutes frequently arising in litigated estate and trust matters; and citations to a few helpful general and Arkansas-specific secondary materials,  please click on the following link:    Written Materials For June 2016 CLE Presentation 

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Brief Thoughts On Claims Of Undue Influence

As stated in my previous post regarding the capacity of a testator to execute a will or trust, the two concepts are closely related.  For example, incapacity relates to invalidation of a will, trust, deed, etc. because of the testator’s own deficiencies (typically mental impairment).  Undue influence, however, is when the will, trust, deed, etc. may be invalidated by the actions of others because they allegedly exercised such a degree of influence and power over the testator thatthey were induced to act by something other than free will.

As a general matter, the less testamentary capacity that one possesses, the less proof of undue influence will be necessary.  A presumption of undue influence may be triggered by a confidential relationship between the testator and someone who is receiving a benefit from the document, such that the burden of proof can shift to the proponent of the document to prove that there has in fact been no undue influence.  Unless there is “procurement” involved, in Arkansas the proponent merely has the burden of proving no undue influence by a preponderance of the evidence (more likely than not, as opposed to a higher standard such as beyond a reasonable doubt).

Obviously influence is ever-present and we are constantly influencing others to take certain actions.  This is especially true in the context of family and other close relationships.  However, mere influence doesn’t necessarily equate to taking advantage of someone.

Accordingly, while a testator may be legitimately influenced by his children, for example, the influence may go too far if the kids dictate or control the testator.  Likewise, the mere existence of a confidential relationship between the testator and the beneficiary, or a close and affectionate relationship, may not in and of itself constitute undue influence although it can in some instances have the effect of shifting the burden of proof.

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Brief Thoughts On Claims Of Incapacity

People often question whether a deceased person was mentally capable of executing or changing a will or trust.  Perhaps the person was suffering from dementia at the time.  The legal question involved in these situations is typically whether the decedent had the requisite “testamentary capacity.”  Testamentary capacity has generally been deemed to mean sufficient mental ability to (1) understand and remember, without prompting, the extent and condition of the testator’s property; (2) understand the “natural objects of their bounty;” and (3) understand to whom the property is being given and on what terms. 

Testamentary capacity is not a particularly high state of mental capacity, but it can be rebutted in some instances by evidence of Alzheimer’s Disease, severe forms of dementia, severe illness, intoxication, etc.  These conditions need to have actually existed at the time of execution of the instrument in question.  For example, the mere fact that mild dementia is diagnosed years before the execution of the instrument does not necessarily mean that the testator lacked capacity when they executed their will or trust, because even a lucid interval of capacity (and people suffering from dementia often have “good days” and “bad days”) can be deemed sufficient.    

Capacity issues are very fact-intensive determinations, and lack of capacity is often pretty difficult to prove.  This is why capacity claims are often coupled with “undue influence” claims, which are often related, frequently alleged in the addition or in the alternative, and sometimes easier to prove.  Undue influence will be discussed in my next post. 

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Demographic Trends Suggest More Estate, Trust And Probate Litigation In The Decades To Come

I have long been interested in demographic trends, emerging technologies, cultural changes, and shifting societal patterns.  For example, 20+ years ago when I was in college I read Alvin and Heidi Toffler's  "War And Anti-War," which while a bit dated now predicts how future wars will be fought (but with an eye toward peace and avoiding such conflicts).   Similarly, about 5 years ago I read George Friedman's "The Next 100 Years:  A Forecast For The 21st Century,"  which was an eye-opening look at how our  nation and world may likely look in the years and decades to come.  I highly recommend either book for some fascinating reading, and it will be interesting to someday see how accurate or inaccurate their predictions were.

 Then,  a couple weeks ago I came across a very interesting article by a Georgia attorney named John J. Scroggin, in Wealth Strategies Journal,  which focused in particular upon 30 positive and negative trends that will impact estate planning over the next several decades:  "Where Is The Estate Planning Profession Going?"    While I focus much of my law practice upon estate, trust and probate litigation---as opposed to estate planning and drafting of wills, trusts, and the like---the article still addressed my areas of interest and I thought I would share a couple excerpts here.  Better yet, lawyers and laypersons   should take the time to read the entire article  which not only encompasses great analysis but also contains good references to other articles, checklists, outlines, etc.

               For example, with regard to estate and trust litigation in general Mr. Scroggin opines that:

               "(9) Estate and Trust Litigation. As a result of the combination of poorly drafted  documents, dysfunctional families, incompetent fiduciaries, greedy heirs, inadequate  planning and poorly prepared fiduciaries, estate litigation has been booming in the last  few decades. This growth will continue.

               One consequence of the increased litigation will be an increased effort by both individual and institutional fiduciaries to make sure estate and trust instruments provide for strong  fiduciary protection. We should anticipate more protective provisions in fiduciary  instruments, including broader indemnity provisions for fiduciaries, modifications of the  normal fiduciary standards and investment polices, broader use of no contest clauses,  limited liability for delegated powers and limits (or increases) on disclosures to  beneficiaries. These changes will increase the need to create counter-balancing powers  designed to protect beneficiaries (e.g., a wider use of Trust Protectors and fiduciary  removal powers). As a result, there will be longer discussions with clients and the  complexity of the documents will increase."

               Related to the foregoing are Mr. Scroggin's thoughts on avoiding estate and trust litigation altogether, through conflict minimization:

               "(10) Conflict Minimization. The corollary to estate and trust litigation is planning  designed to mitigate the potential sources of intra-family estate conflicts. According to  the Wealth Counsel 6th Annual Industry Trends Survey, the top motivation for doing  estate planning was to avoid the chaos and conflict among the client’s heirs. Many clients  have an abiding desire to establish structures which minimize the potential points of  conflict and provide a mechanism to resolve future family conflicts. Clients want to  dispose of assets in a manner designed to minimize family conflict - leaving a legacy of  relationships rather than a legacy of conflict. This is a growing part of the discussion with  clients and a part of their planning documents. Solutions include using personal property  disposition lists, looking at real or perceived conflicts of interest when appointing  fiduciaries, or passing the family business only to the children running the business. As  noted above, attorneys will need to spend more time talking with clients about providing  greater protections to fiduciaries and creating counterbalancing protections for heirs.

 Many individual fiduciaries agree to serve without fully understanding the potential  liabilities and conflict they may be inserting themselves into. Should attorneys provide written materials (perhaps signed by the client and the fiduciary) detailing the  responsibility of the fiduciary, the risk of conflict and the means by which the drafter has  tried to minimize those exposures? Should attorneys more thoroughly advise their clients  on the necessary skill   sets needed by their fiduciaries - instead of just accepting the  client's choices at face value?"

  In sum, as I have written before on this blog, American society is rapidly changing.  The Baby Boomers have begun retiring over the last many years and will continue to do so over the next 2-3 decades.  Large sums of wealth have been acquired and will be transferred to younger generations.  People are living longer, and the aging population will be less competent due to Alzheimer's Disease and other forms of dementia which will lead to conflicts over whether a deceased person had the requisite capacity to execute a will or trust.  These and other trends strongly support the notion that there will be increasingly more estate, trust and probate litigation in the decades to come.

               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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Apparent End To The Huguette Clark $300 Million Estate Battle

In a middle-of-the-night deal during jury selection of a New York trial, it appears that a settlement has been reached in the infamous Huguette Clark estate dispute.  You can read all about it at this link.  I had written about this over 3 years ago back in August 2010 at this link.  This litigation serves as a very interesting case study in undue influence allegations and other issues commonly associated with estate and trust disputes.  A more comprehensive overview of the stories, videos, and other coverage of this saga can be found at this link.          

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, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Random Odds And Ends

A couple of quick things before I head off to celebrate the end of 2010 and the beginning of 2011:

(1) The Wills, Trusts & Estates Prof Blog contained an interesting quote today from the French Enlightenment writer, historian, and philosopher Voltaire, who lived about 300 years ago, which goes to show that the subject matter discussed in my own Blog is hardly new or novel:

"Animals have these advantages over man: they never hear the clock strike, they die without any idea of death, they have no theologians to instruct them, their last moments are not disturbed by unwelcome and unpleasant ceremonies, their funerals cost them nothing, and no one starts lawsuits over their wills."

---Voltaire, French author (1694 - 1778)

(2) A recent article cites a study by the Center For Retirement Research at Boston College for the proposition that Baby Boomers, who apparently have already inherited $2.4 trillion from older generations, are in line to inherit at least $8.4 trillion more.  In fact, according to a December 27, 2010 Associated Press article, starting in January more than 10,000 Baby Boomers a day will turn 65,  a trend that will continue for the next 19 years.  Given those numbers, one can only assume that the number of inheritance-related disputes will continue to rise as well.  

Best wishes for a Happy New Year!

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.

Mediation As An Alternative To Inheritance Litigation

Lawsuits are not the only way to resolve disputes, and arguably are not even the best way.  Litigation can be financially expensive, time-consuming, and emotionally tolling.  Especially in the context of estate, trust and probate litigation, the disputes often involve persons who know each other, including relatives, friends, and business associates.  Accordingly, in addition to the expenditure of money, time and emotions, litigation can sometimes involve harm to the relationships between the litigants. 

Because of the foregoing concerns, different types of alternative dispute resolution have been developed over the years.  One of these methods, in particular, is conducive to the issues arising in inheritance-related disputes.  Specifically, mediation generally involves a third party called a "mediator" who is specially trained to attempt to bring the adverse parties to a compromise and settle their differences.  Unlike the judge or jury, or an arbitrator, a mediator does not resolve the dispute for the parties but instead aims to facilitate a final resolution that the parties reach on their own.  There are many such mediators in Arkansas (e.g., Hamlin Dispute Resolution, ADR, Inc., etc.), and we have successfully used them in the past on behalf of our own clients.  A good article in the New York Times this weekend also discusses mediation in the elder law context. 

A simple fact is that the death of a loved one is already a stressful experience.  If, for example, that person's estate is perceived to not have been distributed in the manner in which that decedent intended (or perhaps in a way in which a would-be recipient originally anticipated it), long-simmering feuds can rise to the surface and minor misunderstandings can erupt into major conflicts.  Occasionally it's too late, but the relationships of the persons involved can frequently be maintained, and their disputes ultimately resolved,  by mediation.  Drawn-out court battles can be avoided or at least minimized, and the money and property in dispute can be preserved instead of exhausted on the litigation process.  Mediation is confidential as opposed to occurring in the public eye, can be scheduled by the parties at their convenience rather than subject to the limited openings in a Court's docket, and takes place in a neutral conference room rather than in an often-intimidating courtroom. 

Not every dispute is ideal or appropriate for mediation, but it can and should be considered as an alternative method of dispute resolution.  

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.

Inheritance Hijackers: Who Wants To Steal Your Inheritance And How To Protect It

At the recommendation of a client, I have recently started reading a fascinating book entitled Inheritance Hijackers:  Who Wants To Steal Your Inheritance And How To Protect It (Ovation Books 2009) written by a Florida attorney named Robert C. Adamski.  The book is primarily written for beneficiaries and potential beneficiaries of an inheritance.  Mr. Adamski's book sets forth an extensive discussion of the growing phenomenon which he calls "inheritance theft," and which of course is a primary component of what I do in my own law practice as well (representation of beneficiaries, but also fiduciaries such as trustees andexecutors, in estate, trust and probate litigation).  "Inheritance theft" is defined on page 2 of the book as "the act of diverting assets from the intended recipient to another person[.]" 

While the book is available for sale at Mr. Adamski's own website, Amazon.com, and I'm sure other places, a good overview of the phenomenon can be found below which is directly from a prior post by Mr. Adamski: 

1.  Who steals inheritances?

Inheritance theft is a crime of opportunity committed by those we place our trust in. These are family members, close associates, care givers and others we depend on as we grow older. Inheritance hijacking is always a surprise to the victim, who never expected a trusted family member or friend to betray their trust.

2.  Who are the victims of inheritance hijacking?

There are always two classes of victims. The first is the person who intended to give the inheritance. The second is the person or persons who were the intended recipient of the inheritance. As we age we are all potential victims because we become weaker in our physical and mental ability. We then are forced to rely upon and put our trust in others. This gives the trusted persons the opportunity to hijack our inheritance.

3.  How are inheritances hijacked?

The hijacker's bag of tricks includes undue influence, duress, forgery, theft by an administrator, marriage, and more. Administrators of probate estates and trusts are common hijackers. They have the opportunity and ability to take advantage. Marriage is the 'Silver Bullet" in the world of inheritance theft because it is all but impossible to overturn a marriage which hijacks an estate. Care givers earn the trust of their victims and as a result are often inheritance hijackers. An important element of inheritance theft is the trust which is gained by the hijacker and later betrayed. Without that element of trust it would be very difficult to hijack an inheritance.

4.  How can I determine if my inheritance is at risk?

Take the Inheritance Risk Quiz at www.ProtectYourEstate.Net to determine the risk to the inheritance you intend to give or the inheritance you expect to receive.

5.  How do I protect the inheritance I intend to give or the inheritance I expect to receive?

Self education and proper estate planning are the first steps. But it does not end there. It is vital to understand how inheritances are hijacked and how to guard against inheritance hijacking. The book, INHERITANCE HIJACKERS: Who Wants to Steal Your Inheritance and How to Protect It, was written to help people protect their families from inheritance theft. Learn more about the book at www.ProtectYourEstate.Net

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I have not yet finished Mr. Adamski's book, but can already tell that I will be recommending it to beneficiary-clients, and potential clients, who anticipate possibly receiving inheritances.  The book contains an immense amount of valuable information for a very reasonable price. 

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.

Update On Gary Coleman Estate Dispute

As a child of the 1980's, I grew up watching Diff'rent Strokes like most people my age.  A white, middle-class kid growing up in Oklahoma, I did not have much in common with two African-American orphaned children from Harlem taken in by a rich Park Avenue businessman, but the show constantly had me laughing, especially when Gary Coleman ("Arnold") would throw out his catchphrase "What'choo talkin' bout, Willis?"   So it was disappointing to hear about the recent death of Coleman, whose post-Diff'rent Strokes life was seemingly as scandal-ridden as the lives of his child co-stars on the show, Todd Bridges ("Willis") and Dana Plato ("Kimberly"). 

Coleman was apparently taken advantage of in life (in the early 1990's he successfully sued his parents and business advisor for almost $1.3 million over misappropriation of his $3.8 million trust fund), and now that he has passed away it looks like there may be additional controversy as well.  Specifically, another blogger who writes on similar topics has provided a good update on the documents and characters who are coming out of the woodwork following his death.  Wikipedia of course also has a good summary of his life and recent events. 

Gary Coleman did not have "Michael Jackson money" but it appears that there is still enough to fight over.  Notwithstanding that Coleman filed bankruptcy in 1999, it is possible that the potential heirs fussing over the leftovers havea special interest in the intellectual property and other rights which could conceivably have value in the years to come as the people in my generation watch reruns and relive the glorious(?) early 1980's.

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.

Federal Appeals Court Rules Against Estate Of Pinup Anna Nicole Smith, "Widow" Of Elderly Texas Billionaire

One of the longest-running estate and trust battles on record added another chapter with the Ninth Circuit Court of Appeals' recent ruling in the saga involving Anna Nicole Smith, now deceased, and her estate's attempt to claim a chunk of her former husband's billion-dollar fortune.  Specifically,  Anna Nicole, stripper-turned-Playboy model-turned-pop-celebrity, married elderly oil magnate J. Howard Marshall in the last year of his life.  She later claimed that Marshall promised her over $300 million although there was apparently no written documentation supporting the gift. 

A msnbc.com article from a couple of days ago summarizes the 15-year legal battle and also contains a link to the 68-page ruling: 

"The convoluted dispute over J. Howard Marshall's money has its roots in a Houston strip club where he met Smith. The two were wed in 1994 when he was 89 and she 26. Marshall died the next year and his will left his estate to his son.

Smith challenged the will in a Houston probate court, alleging the billionaire's son illegally coerced his father to exclude the former Playboy model from sharing the estate. She alleged that her husband promised to leave her more than $300 million above the $7 million in cash and gifts showered on her during their 14-month marriage.

While the probate case was pending in Houston, Smith filed for bankruptcy in Los Angeles, alleging in federal court filings that her husband promised her a large share of the estate.

In late 2000, the bankruptcy court awarded Smith $474.75 million, which a federal district judge reduced to $89.5 million in 2002.

Between those two decisions, a jury in the Houston probate court ruled in March 2001 against Smith. The jury found the billionaire was mentally fit and under no duress when he wrote out a will that left everything to his son.

Since then, the two sides have been fighting over which court to obey.

Smith argued that the federal courts were in charge because the bankruptcy court was the first to rule.

Pierce Marshall countered the decision was the jurisdiction of the probate court, because that's where the first legal action was filed and the site of the only full-blown trial."

Ultimately the Ninth Circuit Court of Appeals agreed with the estate of Marshall's son (who died in 2006) and against the estate of Anna Nicole (you will recall that she died of an apparent drug overdose at age 39 in 2007).  Specifically, the Court held that the bankruptcy court did not have authority to decide a probate dispute such that its $475.75 million award was a mere advisory opinion.  The Court also concluded that the lower court should have relied upon the probate jury's verdict against Anna Nicole and dismissed the entire case rather than merely reducing the award to almost $90 million. 

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.

Arkansas Court Of Appeals Rejects Cousin's Attempt To Set Aside Gifts To The Decedent's "Yardman"

One common thread running throughout this blog since its inception has been the issue of competency, i.e., the ability of a person to make informed decisions.  Conflicts often arise when ill or elderly people are claimed to have made signficant decisions regarding disposition of their property shortly before they died---sometimes the decision will be legitimate, the culmination of some long, thought-out plan that just never was memorialized on paper until shortly before their death---whereas sometimes the "decision" will be illegitimate, the product of undue influence or overreaching by a dishonest relative, family friend, or advisor.  Whatever the facts and circumstances, it can be difficult to prove that the person did not have competency to make the decision that they purportedly made.  A recent Arkansas Court of Appeals decision demonstrates that the outcome of these disputes usually boils down to the specific evidence that was presented to the trial court, and ultimately what evidence that the trial court found to be the most credible. 

For example, on March 3, 2010, the Court of Appeals ruled in the case of Deslauriers v. Marilyn Irene Deslauriers Revocable Trust, 2010 Ark.App. 211.  An appeal from Lonoke County Circuit Court, the appellant (Killeen) attempted to invalidate certain documents (quitclaim deed, revocable trust, will, etc.) executed by her cousin, the deceased, during and after her 2005 stay in a hospital due to a stroke.  As a result of those documents, the appellee (Richard, the deceased's "yardman") received the bulk of the cousin's estate.  Killeen filed suit after the cousin's death to contest the validity of the documents in question, contending that the cousin was not competent to execute them due to her medical condition. 

Under Arkansas law, the party contesting the validity of a will generally has the burden of proving, by a preponderance of the evidence ("more likely than not"), (1) that the decedent lacked mental capacity at the time the will was executed or (2) that the decedent was acting under undue influence.  The Deslauriers Court affirmed the trial court's ruling that the cousin attempting to set aside the documents did not satisfy that burden. 

Killeen presented the testimony of multiple doctors who had treated the deceased around the time of her execution of the documents, and they all testified  that she suffered from dementia and would purportedly be incompetent to sign the documents (though they were admittedly not in attendance at the signing).  Medical records also demonstrated a range of impairment (from mild to severe) at different times during the relevant time period.  Killeen likewise presented the testimony of two non-medical witnesses, one of whom contended that  the deceased was mentally incompetent (in their experience) and both of whom testified that the deceased intended to keep her property "in the family."

Richard presented the testimony of the lawyer whom the cousin used to prepare the documents in question, and he testified that he was very careful to determine whether his client was legally competent to execute the documents.  The attorney also testified that he had been hired to prepare a power of attorney so that Killeen and Richard could be placed in charge of the deceased's business affairs, and that Killeen herself believed the deceased to be an odd person but very competent.  Two other witnesses also testified, in a manner favoring Richard's position, to the extent that they were disinterested employees working at the hospital where the deceased was treated and they observed her as competent when they witnessed her signing of the will.   Richard also offered other evidence in the form of the attorney testifying that he met with the deceased several times after her initial execution of the documents, and in the  form of a doctor who treated the deceased remarking that he was impressed how mentally capable (though not physically capable) she remained after her stroke.

In sum, the trial court concluded that the cousin did not prove incompetency and that the deceased was sufficiently competent at the time that she executed the documents.  The Court of Appeals affirmed, holding that while proof of medical condition around the time of the execution of the documents is relevant and important, ultimately the medical condition at the time of execution is paramount.  The Court seemed to attach particular significance to the testimony of the witnesses who were actually in the room when the decedent signed the documents in question.  Observing that it is possible for a testator to execute a document during a "lucid interval" in a period where they may otherwise be incompetent as a general matter, the case generally demonstrates the difficulty that a party can have in attempting to prove a testator's   incompetency. 

Court Rules Testator Was Not Under Insane Delusions When He Revoked His Will

It has been estimated that well over 1/2 of all Americans do not have a will.  I personally know many attorneys that do not even have a will, even though virtually every Arkansas lawyer passed a bar examination covering wills and trusts and more than likely also took a decedents' estates class in law school.  Whether because of not wanting to confront the inevitable (death), procrastination, or other factors, drafting a will is simply not high on the list of priorities for a large percentage of people. 

A primary reason why people do have a will, however, is to have direction and control as to whom their property will be distributed after their death.  Dying without a will is called dying "intestate," and the intestacy laws of the State of Arkansas set forth a rather strict statutory scheme detailing how a person's property will be divied up (to children, descendants of children, surviving spouse, parents of the decedent, etc.).  If a person does have a will, but then validly revokes it without ever executing a new one, then that person will "die intestate" as well.

That is what happened in the recent appeal of Heirs of F.D. Goza, Jr., et al. v. Estate of William E. Potts, Deceased, CA 09-235 (February 17, 2010).  Specifically, this was a probate case in which the former in-laws of the decedent, Mr. Potts, were attempting to take their shares as beneficiaries of a 1989 will which, the estate asserted, was revoked sometime between 2002 and Mr. Potts' 2006 death.  The appellants, relatives of Mr. Potts' deceased wife, Ms. Goza, argued that Mr. Potts lacked testamentary capacity and was under insane delusions when he revoked his will.  The trial court disagreed, ruled that Mr. Potts died intestate (meaning that Mr. Potts' property amounting to several hundred thousand dollars went to persons other than the appellants), and the Arkansas Court of Appeals affirmed. 

The facts and circumstances surrounding Mr. Potts' revocation were interesting to say the least, and involved Mr. Potts marking "void" over each paragraph, writing "bastard" and "get nothing" on the will, applying Liquid Paper over the names of the beneficiaries, and later shredding the document in front of witnesses.  There were tales of alleged affairs and "wife stealing," temper tantrums, and other curious claims, but in the end the Court held that "the evidence clearly showed that Bill was an irascible, angry, suspicious, controlling, profane, and difficult man for most of his adult life; however, we cannot say that the trial court erred in refusing to find that he labored under insane delusions."   

The lesson learned from this case is that not only must a testator have the capacity to execute a will (the ability to understand the effects if executed), the testator much also have the same capacity to later revoke that will after it has been executed.  As the Court held, "complete sanity in a medical sense is not essential to testamentary capacity, provided power to think rationally exists."  Given the steep standard for proving lack of capacity by a testator, contesting a will (or, in this case, a will revocation) can be a difficult task in the absence of very persuasive evidence.    

Court Rules Handwritten Note Found By Deceased's Mother Did Not Result In Change Of IRA Beneficiary

As previously discussed on this Blog, a common fact scenario in estate, trust and probate lawsuits involves an eleventh-hour change in a dying person's final wishes regarding their property.  Quite often the last-minute decision appears legitimate, although occasionally there is an aura of suspicious facts and circumstances surrounding the event which arises to the level of an "inheritance theft."  Frequently the change in question is expressed in the form of a handwritten note, and courts are commonly called upon to rule whether or not such "wishes" will actually be  enforced.

On January 27, 2010, the Arkansas Court of Appeals addressed a somewhat similar situation in the case of Nunneman v. Estate of Donald T. Grubbs, et al, Case No. 2010 Ark.App. 75.  Specifically, Mr. Grubbs had named Ms. Nunnenman as beneficiary of his IRA, and a few days before his death evidently called a lawyer to his hospital bed and executed a will, leaving all of his property to his mother, Ms. Grubbs.  She then asked the Court to freeze certain IRA monies contending that she had discovered a 2005 note in Mr. Grubbs' bible which stated:  "My Will.  I Donnie Grubbs want all of my estate All IRA and any SBC Telco and all other assets and worldly goods to go to my Mother Shervena Grubbs.  Being of sound mind.  Donnie Grubbs."  Ms. Grubbs alleged that she had found the note in the presence of a coworker, but that witness claimed that she had not known of the note's existence before the trial. 

After considering the evidence, the trial court ruled that the handwritten note should have the effect of changing the IRA beneficiary.  Ms. Nunnenman appealed and the Arkansas Court of Appeals reversed the trial court, ruling that it was clear error to find an effective change of the IRA beneficiary.  Specifically, the Court pointed to the conflicts in the testimony regarding the discovery of the note and also focused upon the fact that the very person who discovered the note was the same person who would end up benefitting from its discovery.  The Court also opined that it was significant that while Mr. Grubbs had undertaken steps to call a lawyer to come to his bedside, he had not taken similar measures to change his IRA beneficiary. 

In sum, this case is a good example of the heavy burden that a party has when attempting to prove a change in property disposition by means of a handwritten document.  As a general matter the Court will need to be presented with a strong showing of evidence before favorably considering such a request. 

Billionaire's Former Lover's Shenanigans Fail In Will Contest

Most estate and trust conflicts for which our law firm is retained, either to represent the fiduciary (executor, trustee, etc.) or the beneficiary to whom the fiduciary duty is owed, involve anywhere from several hundred thousand dollars to several million dollars.  The fact is that the substantial time and expense associated with litigating smaller amounts in dispute can often be cost-prohibitive for the client.  Because the matters that we assist with typically involve family fortunes within the above-described range, wealth wars erupting over $4.2-plus billion are rare indeed.

However, that is precisely what occurred as recently noted in a February 2, 2010 post by the Michigan Probate Law Blog, in the case of Hong Kong tycoon Nina Wang.  Asia's wealthiest woman, she died of cancer in 2007 at the age of 69.  Following her passing, a gentleman named Tony Chan, who also was her former lover and feng shui master, revealed a 2006 will which purported to leave her entire fortune (which has been estimated to possibly range up to $13 billion) to him instead of to charity.  In what might be the mother of all will contests, the Court ruled that the will was a forgery and that the signatures contained on the document were a "highly skilled simulation."  In fact, in a 326-page opinion, the court held that Mr. Chan "lied and withheld relevant information from the court regarding the circumstances leading to the preparation of the document." 

Lost in the fact that Mr. Chan has apparently now been arrested for his shenanigans is the fact that another will of Ms. Wang's actually bequested $10 million to Mr. Chan.  Seems like Mr. Chan could have benefitted from a phrase that we often toss around here in Razorback country, which rings especially true in this case:  "Pigs get fat, hogs get slaughtered."   

UPDATED: Dispute Erupts Over Wealth Of Deceased Billionaire Shopping Mall Developer

Pretty much anyone who has lived in Central Arkansas over the last few decades has been aware of if not actually visited University Mall in Little Rock's midtown area.  While it used to be the hot spot for shopping many moons ago, in more recent years it became better known for its empty stores and the litigation that resulted from disputes over the mall's management.  The mall closed in 2007, demolition began in 2008, and a brand new mixed-use development appears imminent for the property in the next year or two.  

Anyone familiar with University Mall is also undoubtedly aware of its close proximity to Park Plaza Mall.  Ever since moving to Arkansas back in 1992, I never understood why University was built almost literally next door to Park Plaza (built a few years earlier in 1959), yet another enclosed shopping mall.  But I guess that's why I'm a mere lawyer and the folks who make the big bucks are mall magnates like Melvin Simon. 

Specifically, University Mall was developed by Melvin Simon & Associates, an Indianapolis-based real estate development and management company which later became known as Simon Property Group.  I mention this because Simon Property Group is evidently the largest public U.S. real estate company, and shopping mall development made the company's namesake---Mr. Simon---a very wealthy man.  He and his brother, who also co-founded the company, eventually purchased the Indiana Pacers franchise of the National Basketball Association. 

According to a recent post on the Florida Probate & Trust Litigation Blog,  the Wall Street Journal writes that a wealth war has begun over the terms of Mr. Simon's will.  Apparently, Mr. Simon's wife was only supposed to receive approximately one-third of his fortune and, after some changes were evidently made to his will a few months before his death, she now stands to receive about one-half.  Considering that his wealth has been estimated at $1-2 billion depending upon the fluctuating stock price of his company, even minor changes in his will could amount to a major redistribution of wealth.  Notably, the changes cut out Mr. Simon's three children from his first marriage.  

At least one of those children is now suing Mrs. Simon, their stepmother, contending that she unduly influenced Mr. Simon and persuaded him to change his will to reduce the children's inheritances.  The lawsuit also alleges that Mr. Simon had dementia and needed assistance signing the document, to which Mrs. Simon has now apparently responded that while he did in fact have Parkinson's Disease and needed help with his signature, he voluntarily signed a new will and trust of his own free will.  This will be a wealth war worth watching in the next few months. 

Seemingly sudden changes to wills and trusts shortly before someone dies are one of the most common disputes arising in estate, trust and probate litigation.  As the Baby Boomer generation begins to retire and ultimately pass away, there will no doubt be millions more similar disputes in the decades to come. 

UPDATE:  The following link contains the latest update (as of 2/11/10) from the Wall Street Journal.