Episode Transcript:
Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. We’re back to the top of our rotating topic (as a reminder, we rotate between 1) estate planning of the rich and famous; 2) cautionary tales; and 3) current trends/hot topics – so today, we are back to estate planning of the rich and famous and we’re going to be talking about Anna Nicole Smith.
For the young’ins in the crowd, Anna Nicole Smith was a well-known model in the 1990s – she modeled for many “big name” companies. According to an article in Forbes, Anna met her late husband, billionaire J. Howard Marshall and married shortly after – specifically in 1994. The kicker? Mr. Marshall was 89 years old. Anna was 26. Just one year after they got married, he died – without updating his Last Will and Testament. (For clarification, that means Anna was not in his Will.)
Marshall had two sons – Howard III and Pierce. It turns out that Marshall disinherited Howard III, so ol’ Howard III and Anna teamed up to contest the Will. According to that same Forbes article, the local probate court in Texas found in favor of Mr. Marshall’s Will beneficiaries – therefore, ruling that Anna nor Howard III should get anything. Some thought that it would end there – ohhhhh noooo…
Anna filed for bankruptcy in California and claimed that Marshall’s son, Pierce, (the one that WAS still in the Will) *quote* “interfered with her potential inheritance.”* Somehow, someway, the Court agreed with her argument and ruled in her favor for … um, 474 Million Dollars! That, of course, got appealed – and the Court of Appeals threw out the entire award specifically claiming that the Bankruptcy Court lacked jurisdiction.
I won’t bore you with the super legal-y details, but long story short, the case got appealed to the US Supreme Court because there was some … scuttle-butt about whether the Bankruptcy Court had jurisdiction or not. The US Supreme Court, according to the Forbes article, said they’d only hear the matter on a specific piece of the law – that is, who had jurisdiction? So, it was NOT for whether Anna should get a cut of the estate – it was merely done for clarification on whether prior decisions stood up or not.
The Supreme Court, in Marshall v. Marshall (that’s this case), UNANIMOUSLY (that’s hard!) that the Bankruptcy Court did have jurisdiction and therefore, in a way, you can say Anna’s side won. Though, remember, this was not about winning in the estate case – it just allowed for Anna to continue the fight!
But in just a totally insane twist – Marshall’s son, Pierce (the one that WAS in the Will and was fighting against Anna), died about a month after the Supreme Court decision – and then about six months later, Anna died at the young age of 39! HOLY. COW. Boy, don’t you know the fight didn’t die down – Pierce’s widow picked up the baton and continued the fight – and so did Anna’s Executor. I imagine, in my head, like a box match – round two, ding, ding!
In effort to not make this episode 1 hour long, I’ll give you the cliffnotes version – Supreme Court, sort of, reversed their decision in a way … and basically said that the Court of Appeals decision, the one that was throwing out Anna’s win, was right. Thereafter, Anna’s Estate, through her Executor, then went after Pierce’s Estate (again, the son that was still in the Will). All of this according to the Forbes article. (Now that I say that, I wonder what happened to Howard III – the one that was teaming up with Anna to contest the Will – he doesn’t really get talked about. Maybe he gave up mid-way!)
The Court shewed this claim away like a gnat buzzing around his head – Judge essentially said, “Nope – you, Anna’s Estate, don’t get anything from Pierce’s Estate.”
Crazy enough, it’s been the same Probate judge through essentially the entire case. That’s a little looney to think about from my chair. Anyway, just a handful of years ago in 2017, the Judge, his name is Judge Mike Wood, went off on the family – here, I’m going to read a direct quote from him. He said:
“I am tired of this case. I’ve told you from the beginning. I beg you to recuse me. I don’t want to deal with you people anymore. This is ridiculous. This is ridiculous. I am not going to spend a lot of time cutting at nits and gnats for people that are fighting over 20 billion …They didn’t create this wealth. It was created by a third party, and they’re just fighting over it. They can’t agree on anything. They can pay lots of lawyers. They can pay lawyers until hell freezes over. But they don’t want to agree to anything. They just want to pay lawyers.”
Wow. And guess what? He recused himself a week later. Is that not like the best “mic drop” moment ever?! So since then, a new Judge has been hearing this case – and I’m sure playing the most not-fun game of “catch up.” That’ll certainly delay things.
Well, the estate planning disaster/craziness/I don’t know what to call it…doesn’t stop there. So we know that this all came about because Marshall had not updated his estate plan to include Anna – one would think that Anna would learned that valuable lesson. She didn’t. When she passed away, her Will was outdated too! So let’s talk about hers…
According to an Elder Law Answers article, Anna, when she passed away, left a five month old daughter named Dannielynn – though she (Anna) had a son named Daniel that had predeceased her. Daniel actually died a very short period of time after Dannielynn was born. So Anna’s Will left everything in a Trust to Daniel and I sort of thought this was estate planning 101, but she never provided “what happened” if Daniel had predeceased her.
According to a paper by Joanna Grossman, a professor, Anna’s Will surprisingly contained a provision specifically omitting “future born or adopted children.” Let’s chat about this for 2 seconds – so children do NOT have an automatic legal right to be included in a parent’s Will. (Hear me, kiddos out there!) Though, the law is quite clear that they do have a right if there’s sufficient proof that perhaps they were inadvertently overlooked. However, Dannielynn may get lucky – because Daniel’s Trust “failed” due to him predeceasing Anna, the Estate will be distributed according the state’s intestacy laws.
We’ve talked about intestacy laws before in prior episodes – super long story short, every state has a default estate plan for people who die without a Will or without a valid Will.
At the time of all this going down, Anna’s mother, Virgie, was living – so there was discussion as to who would inherit Virgie or Dannielynn. Most thought Dannielynn still. PS – We don’t have time on this episode, but also since Anna didn’t update her Will, she didn’t provide who she would want to be Dannielynn’s legal guardian – and because of that, three different men have come forward to claim paternity – even more recently, a fourth came forward. The frozen sperm of her former husband, Mr. Marshall. I can’t even make this up, guys…. thank you for researching this Professor Grossman. Good stuff.
It was ultimately determined, after many headline-making stories, that Larry Birkhead, a former boyfriend of Anna, was the father of Dannielynn – well, the paternity test results said Birkhead was 99.99% likely the father at least!
Beyond all that, there was even a legal fight over where Anna would be buried – According to an article in People Magazine, Anna’s mother wanted her buried in Texas at a family plot; though, she had a friend that claimed she wanted to be buried next to her son, Daniel, in the Bahamas. Then Birkhead, Dannielynn’s bio father, claimed she wanted to be buried in California next to Marilyn Monroe. Again, all these things SHOULD be in writing, people! Anyway, Anna’s friend must have won because she ended up getting buried in the Bahamas – according to Professor Grossman’s paper.
So who will inherit from Anna’s Estate – and the much bigger question, how much will they inherit? There are so many TBDs – until Marshall’s Estate gets officially settled, Anna’s Estate is sort of in the shadows waiting to see what, if anything, will flow through it from Marshall’s Estate. Dannielynn will probably receive all or a majority of anything flowing through Anna’s Estate.
Let’s quickly recap – J. Howard Marshall died in 1995. Anna died in 2007. And things still aren’t settled? Got it. Friends, #DoYourEstatePlan … and keep it updated!
Next week’s topic is a cautionary tale – a real-life case I’ve personally worked on. This isn’t like Anna Nicole Smith and her estate planning looney tunes … this isn’t fancy celebrity estate planning. Cautionary tales are about people like you and I, families like yours and mine, and they’re called cautionary tales for a reason … don’t let what happen to them, happen to you!
Until next time, Legal Tea Listeners…talk soon!
Sources:
(Anna’s Will)