Dennis Hopper was buried Wednesday in Taos, New Mexico. It appears that his death last week means that the Los Angeles County probate court will be the site of another interesting proceeding. As if they do not have enough already!

Everything that I have read about Mr. Hopper indicates that his life had a lot of twists and turns. His estate has been reported to be worth thirty million dollars. At the time of his death, he was embroiled in a divorce proceeding with his fifth wife, Victoria Duffy-Hopper. There are indications that prior to his death, there were settlement discussions in the divorce proceeding.

The couple had a prenuptial agreement that provided Duffy-Hopper with a percentage of the estate and some cash provided they were married and living together at the time of his death.

Were they living together? Good question and one that the probate court might be required to ultimately decide as they lived in side-by-side houses on a property.

It is likely that the court will order that the estate set aside money for the couple’s seven-year-old daughter if the estate planning documents do not provide an adequate share. However, more than likely they do as Hopper had indicated in court filings that he had arranged his affairs so that his four children would receive a “substantial portion”. Hopper had three adult children from previous marriages.

I am not sure whether the matter will be heard in Santa Monica or at the main downtown courthouse, but I am certain that one group of people will do well – the attorneys. It is in disputes like this that the real winners are the lawyers.

This is a follow-up to my thoughts after reading Mr. Jackson’s trust. Obviously, he was not an ordinary person and while he was certainly different than my clients, his desires were very similar to the great majority of my clients and to people everywhere.

In his “family” trust, he divides his estate into three shares in the short term. He provides that twenty percent of his gross estate shall be distributed to “one or more charities for the benefit of children and/or children’s causes.” He appoints his mother and the two co-executors of his will to select the charities.

One-half of the remainder of his estate, after all expenses and taxes have been paid, is to be divided equally for his children. Until a child is 21, the trustee is instructed to pay to or use for the benefit of the child the net income of the trust. Any net income not used, shall be added to principal. Upon the child attaining age 21, the instructions to the trustee change only slightly as it appears that all of the net income is to be utilized on behalf of the child. When a child attains age 30, he is to receive one-third of his/her trust; when the child attains age 35, one-half of the remainder or the second third; and at age 40, the child is to receive the balance of the trust.

The remaining one-half to be held in trust for his mother. She is to receive “as much of the net income and/or principal of the trust estate as the Trustee deems necessary or desirable, in his absolute discretion for KATHERINE’S care, support, maintenance, comfort and well-being.” Upon her death, the amount held in trust for her is to be added to Michael Jackson’s children’s trusts.

The distribution scheme, or a variation thereof, for his children is used quite frequently. Query, might he have set-up a different type of trust for his children that would have shielded and protected the assets from creditors, divorce, and wasteful spending.

That is something that I will explore in an upcoming post!

Michael Jackson’s trust is available on the internet for anyone to read. The fact that it is easily accessible dispels to some degree one of the “advantages” that attorneys (including this one) have offered of living trust over will and that is that the document is a private document and is not public record.

It is true that revocable living trusts, frequently called family trusts, are not required to be filed in the probate court upon the trust maker’s (also known as a settlor, trustor, or grantor) death as a condition of administering the trust. However, in the event that there is litigation, the trust will have to be filed in the probate department of the superior court. Once that happens, it is open season.

Does that mean that living trusts are not advantageous? No. I believe that living trusts are advantageous over simply doing a will in California because of the avoidance of probate. In some other states, New York and New Jersey come to mind, probate is a much simpler process than it is in California so that advantage is negated and there are many esteemed attorneys in those states who have a different view of revocable living trusts than do lawyers in California.

In my next post, I will provide a summary of what Michael Jackson’s trust actually says!

Many know that this year and for this year only there is no estate tax. Anyone can die, and his or her estate will not be taxed. Next year, if Congress does not pass a new law, the applicable exclusion amount reverts to $1,000,000 per person – the same as it was in 2001.

Who benefits by Congress (and the President) doing nothing? It could be argued that in the short run, the number one beneficiary is politicians from both political parties. It is a campaign issue especially for Republicans. Republicans use the fact that Congress has not passed a bill addressing this issue with their supporters as an issue that needs to be dealt with and the higher the applicable exclusion amount the better. Democrats, on the other hand, take the opposite approach, arguing that the estate’s of the wealthy should have to pay and also believe that this is a way to raise tax money for all of the programs they have been creating.

The individual States also benefit as the reinstitution of the federal estate tax will bring revenue to states like California that have coupled themselves with the federal government. This would be a benefit to many states treasuries especially in the short run.

Another beneficiary is insurance companies. Irrevocable life insurance trusts are not nearly as popular when there is not an estate tax or when the applicable exclusion amount is $3.5 million per person as they are when the applicable exclusion amount is $1 million per person.

Similarly, charities by and large like the estate tax. Why? The belief is that people will leave money to charity instead of to the government. Therefore, the people who run our hospitals, museums, universities, etc. are generally in support of the estate tax because taxpayers will create charitable remainder trusts; charitable lead trusts; and private foundations.

That leads me to the final group who benefits when the estate tax affects more people and that is estate planning attorneys. Our services are needed more than ever. All types of trusts for all types of estates will be needed!

The answer to the question is that sometimes you do not know!

I recently read that the Tennessee Supreme Court has ruled that the estate of the widow of Jim Reeves should be reopened. Jim Reeves was a country singer who died in a plane crash in 1964. His widow died in 1999 and her will went through probate. However, a second will was found in 2005 that was more favorable to the man she was married to at her death. In fact, it named him as her sole beneficiary.

The husband filed a petition for probate with the newly found will. The administrator of the estate contended that the husband’s petition was time barred. The Tennessee Supreme Court upheld the lower court’s ruling denying the summary judgment because it held that there were legitimate questions as to whether the second will had been purposely hidden.

Generally, the estate planning rule is that the most recent estate planning document controls. I am of the belief that some people destroy wills that are unfavorable to them. (Fortunately in the Tennessee case, the Will was at worst hidden and not destroyed.)
It is important that testators make known to people where there most recent document(s) is/are located. It does not necessarily mean that they provide access to the will or living trust, but it does mean that they tell at least one person where to find the document.

In other words, implement a plan so that there are not problems later!

Larry Lee Hillblom was a very successful and some would say unconventional man. He was the cofounder of DHL. Prior to cofounding DHL he was a graduate of Boalt Law School at the University of California at Berkeley. At age 26, in 1969, he cofounded DHL who business purpose was to deliver shipping documents via airplane days before the ships arrived. This enabled the ships to be unloaded quickly. Later the company became an all-purpose air courier.

Hillblom died in an airplane crash in 1995 and his body was never recovered. Almost immediately his estate was contested. In 1982 he had a will prepared leaving virtually all of his assets to the University of California, San Francisco. However, upon his passing, various women alleged that he was the father of their children. Since his body was never recovered, there was no DNA to prove or disprove their claims. Moreover, his house in Saipan which might have been a source of his DNA was of no help.

Initially his family was not helpful with investigators. So investigators took a different route and compared the DNA of the children who were alleged to have been fathered by Hilblom. Ultimately, 60% of his estate was to be distributed to four qualified heirs. Therefore each air was to receive approximately $90 million.

Now nearly 15 years after his death, one of his heirs is suing the attorney who represented him for legal malpractice, breach of fiduciary duty, fraud, civil conspiracy, racketeering activity, and violations of the California Business and Professions Code.
The heir alleges that he was charged an inappropriate attorney’s fee and that while his settlement with the estate was for $90 million after all the fees he paid, he only received $12 million.

The moral of the story is that proper estate planning allows the rightful heirs and beneficiaries to receive what the descendent wanted them to receive. It is true that an individual has a duty to provide for his children until they are a majority, but after that an individual is free to do with his or her money as he or she sees fit.

In this case whether or not the heir is correct a lot of money was spent in probate litigation and probate attorneys and not benefiting who Mr. Hillblom would have preferred to have received his estate.

Many of us in California are not familiar with the name Melvin Simon. Yet most of us have been to a Mall that his company either developed or owned. Simon Property Group Inc. is thought to be the largest shopping mall owner in the United States. He also was one of the pioneers of the outlet mall concept and with his brother was the owner of the Indianapolis Pacers of the NBA. In his spare time, he had a hobby of financing movies including “Porky’s”.

As seems to happen with a lot of wealthy and/or famous people, his estate is in litigation. Approximately seven months prior to his death in September 209, he executed new estate planning documents. The new estate planning documents substantially increased his wife’s share to the detriment of his children from a previous marriage.

Mr. Simon’s eldest daughter has filed a lawsuit wherein she contends that he was under duress when he signed his will and to buttress her claims she indicates that he needed assistance to sign his name.

Mr. Simon’s previous will provided his wife with one-third of his estate; the second-third was to go to his four children (one of which was his wife’s child from a previous marriage) with the income from that one-third of the estate going to his wife for the remainder of her life; and the final third to be distributed to charity.

In February 2009, he signed a new will which increased his wife’s share to one-half of the estate. In addition, the other half would, after her death, go into charitable trusts with the children receiving the remainder interest from that half twelve to fifteen years after her death. In other words, not much to the children anytime soon!

Generally speaking when someone challenges a will (or revocable trust), he/she has the burden to prove that the person making the will (or living trust) was incompetent, unduly influenced, or subject to fraud or mistake.

Generally speaking, people are allowed to leave their estate to whom they want provided none of the above applies. The judge has already dismissed the claim for fraud by ruling that the complaint was not specific enough with regard to that allegation. The undue influence and lack of mental capacity claims were kept alive by the judge.

This will be an interesting probate case to monitor. It is one situation where whether or not there is a living trust is irrelevant.

While I like to tell my clients that an efficient probate in California takes between 7 to 10 months from start to finish, some estates are just meant for controversy.  This happens more frequently when there is a blended family; when there is a step-mother or step-father; and when children are not friendly.

I am not sure that having the best estate planning in the world would have been helpful in Texas oilman J. Howard Marshall’s case.  Not when he left the wife who he happened to be married to out of the mix and her name was Anna Nicole Smith.

For those who need a recap, here it goes.  Marshall was 89 years old when he married Smith who was a 26 years old bride in 1994.  Fourteen months later he died.  Smith attempted to be an heir to half of his estate despite the fact that he had estate planning documents that left everything to his son, Pierce.

In 2001, there was a nearly 6 month jury trial in Houston that found that Pierce was the legal heir.  Smith later filed for bankruptcy in California and the federal bankruptcy judge awarded her slightly less than $450 million from Marshall’s estate finding that there was tortuous interference by Pierce Marshall in his father’s estate planning.

The bankruptcy decision was appealed by Pierce Marshall to a federal district court in California.  Ultimately in essence that court reduced the award to Smith to $88.5 million.  Next, the 9^th Circuit Court of Appeals overruled the awards by holding that neither the bankruptcy court nor the federal district court had the jurisdiction to rule on Marshall’s estate because it was essentially a matter for the Texas probate courts.

From the 9^th Circuit, the matter went to the United States Supreme Court which decided in 2006 that the federal courts can have some jurisdiction over probate matters.  On Friday, March 19, a panel of the U.S. 9^th Circuit Court of Appeal held that Marshall’s will was valid and free of illegal coercion by his son Pierce.

As most reading this are aware, Anna Nicole Smith died in 2007 and Pierce Marshall died in 2006.   

The case may not be over.  The attorney for Smith’s estate stated that he will appeal to the entire 9^th Circuit Panel.

The following is an excerpt from an interesting article published by AP, read the full article here.

“When author Tasha Tudor’s ashes were finally buried, it wasn’t in one place. Her bickering survivors couldn’t agree on when, where and how, so a judge ordered her cremated remains divided in half.

On Oct. 17, sons Seth Tudor and Thomas Tudor and daughters Bethany Tudor and Efner Tudor Holmes buried some under a rosebush she loved in her garden and the rest on Seth’s neighboring property, where her precious Pembroke Welsh corgi dogs were already buried.

Call it the war of the Tudors: Almost two years after the famed children’s book author and illustrator died at 92, a battle over her $2 million estate rages on - pitting sibling against sibling, blasting through her assets with Probate Court litigation and sullying the eccentric artist’s name.

At issue: family grievances old and new, including whether Tudor was unduly influenced when she rewrote her will to give nearly everything - including dolls now on loan to Colonial Williamsburg - to Seth Tudor, 67, her older son.”

“Tudor’s 2001 will asked that she be buried with her predeceased dogs and the ashes of her pet rooster Chickahominy, should he die before her. It left the bulk of her estate to Seth Tudor, of Marlboro, and his son, Winslow Tudor; it left $1,000 each to the two daughters and nothing but an antique highboy to Thomas Tudor - because of their “estrangement” from her.

It gave her collection of 19th-century clothing to the Colonial Williamsburg Foundation. Officials there declined comment for this article; Seth Tudor’s lawyer didn’t respond to requests for comment.

Thomas Tudor is challenging the validity of the will, saying his brother wielded undue influence over their mother, causing her to cut them out of an earlier version. In Probate Court filings, Seth Tudor denies it.

Now, attorneys for the brothers are wrangling about the extent of Tudor’s assets, fighting over even the smallest details, including who was responsible for a $140 snowplowing bill for the narrow, unpaved road that leads to the Tudor compound, where Seth Tudor and his family still live.”

The actress Brittany Murphy died in December 2009 at the too young age of thirty-two having been born on November 10, 1977.  Brittany Murphy moved to California to pursue acting and was on an episode of Murphy Brown in 1991. She landed a recurring role in her first television series, Drexell’s Class, when she was still 13 years old.  While she had roles in several television series in her teens, her first large movie role was in 1995’s Clueless.  She was a very talented woman whom the critic Roger Ebert at one time compared to Lucille Ball.  Moreover, she was a prolific actress having been in over 30 movies and over 20 televisions shows including 226 episodes of the show King of the Hill for which she did voicework from 1997 through 2009.

Brittany married Simon Monjack in May 2007 and was married to him at her death.  Shortly after her death it was reported that she had executed her will prior to marrying her husband.  It was widely known that she was very close to her mother and many speculated both in writing and orally that in her will and or trust, that she left everything to her mother. 

The fact that she may have executed her will prior to her marriage and therefore did not provide for her husband is frequently nearly meaningless in California.  California law, as does the law of many states, provides for this possibility and dictates that the surviving spouse generally inherits. 

California Probate Code Section 21610 provides that if someone fails to provide for his/her surviving spouse in an instrument executed prior to marriage, the spouse shall receive the one-half of the community property that belonged to the decedent (remember one-half is already his/hers); and the share of the separate property of the decedent that he/she would have received had he/she died without having executed a will or a cannot  exceed one-half of the value of the separate property.

Therefore, Brittany’s husband will inherit from her unless he specifically gave up the right to inherit in a written agreement.  This can be done in a premarital agreement or some other such agreement provided it is demonstrated that the waiver was fair at the time of signing and the surviving spouse was represented by counsel at the time of the signing.

Therefore, if Mr. Monjack does not inherit from his wife’s estate it is because he agreed that he would not inherit.  In California, at least, the probate law is clear on that point.