Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. We’re back to “estate planning of the rich and famous” where we chat about celebrities and their estate planning. Today’s episode is on Tom Petty, such a well-known musician, and like I referenced at the end of my last episode, a lot of Indiana peeps like Tom Petty because he had that reference to Indiana at the very beginning of his famous song, Mary Jane’s Last Dance! In all seriousness, Tom has got to be one of the best musicians of all times – according to his Wikipedia page, he had THREE albums land on the Rolling Stones’ 500 Greatest Albums of All Time list … and had two songs on Rolling Stones’ 500 Greatest Songs of All Time. It’s hard to find someone that does not know a Tom Petty song!
As always, before we dive into what happened estate-wise, let’s talk about Tom’s personal life. According to Tom’s Wikipedia page, Tom married a lady by the name of Jane Benyo in 1974 – Tom and Jane had two daughters, Adria and Annakim, who informally goes by Kim. Many years later, Tom and Jane divorced in 1996. Then, in 2001, Tom married a lady by the name of Dana York. Dana had a son from a prior relationship, and his name was Dylan.
As we know, Tom brought us many great hits over the years – so many songs, albums (I think I saw 16 albums!), and tours (including worldwide tours). In 2008, Tom Petty and the Heartbreakers played the halftime show at the Superbowl – they played a few of their greatest hits such as “American Girl” … “I Won’t Back Down” … “Free Fallin’” … and “Runnin’ Down a Dream.” After a wildly successful career, Tom was unfortunately found unconscious on October 2, 2017 at his home. A few months later, the Los Angeles County Medical Examiner shared that Tom passed away accidentally and due to drug overdose (according to CNN) – which the drugs were a combination of things that I probably can’t appropriately pronounce, but most were opioids, sedatives, and antidepressants.
Following his passing, his wife, Dana, and daughters shared in a statement that Tom was dealing with a handful of medical issues including emphysema, difficulties and pain in his knees, and a fractured hip. Crazy enough, according to their statement, on the day of his death, Tom was informed that his hip injury had worsened. A portion of their statement said, “It is our feeling that the pain was simply unbearable and was the cause for his overuse of medication. We feel confident that this was, as the Coroner found, an unfortunate accident.” A few months later, in September 2018, Dana, his widow, did an interview with Billboard and she said that Tom had intentionally delayed his hip injury – because “he had it in his mind it was his last tour and he owed it to his long-time crew, from decades some of them, and his fans.” Man, so sad.
Now shifting to his estate and estate planning…
So, Tom had created a Trust as part of his estate plan. That means YAY! He did an estate plan – at least he DID one (which many, many celebrities who have passed can’t say…). Anyway, Tom’s Trust had his widow, Dana, appointed as the sole Trustee following Tom’s passing. Keep in mind that Dana was NOT the mother of Tom’s two children – Dana is their stepmother. So, Tom’s Trust stated that Dana was the sole Trustee, but it also said that Adria and Kim were to be entitled to participate equally in the Trust’s management. As an estate planning attorney, I’m thinking, “WHAT?! What does that even mean?” If they are entitled to participate in management, that is the role of a Trustee, but yet he only had Dana as the Trustee.
Of course, this setup was a disaster. Fairly soon after the estate got rolling, Dana and Tom’s daughters began disagreeing and their relationship deteriorated. According to a blog post by Holstrom Block & Parke, a law firm in California, “the language in Petty’s estate plan is clear about WHO should be involved in managing the estate, but it does not provide instructions about HOW the three parties should make decisions. That is troublesome.” You are right, Holstrom Block and Parke. It sure is troublesome. So troublesome that Dana ended up petitioning the local Probate Court to ask the Court to clarify how Tom’s estate should be managed.
Interestingly, well it’s interesting, but not surprising, each “side” is interpreting the Trust in their own benefit/favor. According to The Karp Law Firm, an estate and elder law firm in Florida, Adria and Kim argue that if they get equal participation in the management, they can, sort of, gang up on Dana and outvote her on things. So, for example, there is an LLC as part of the estate plan, and because they get 2 out of the 3 management votes, they outvote Dana so long as the two of them agree.
Conversely, Dana thinks that the Trust suggests that the three of them have to work, manage, and make decisions unanimously – not majority wins. In the lawsuit, Dana claims that Adria and Kim, especially Kim, have “demonstrated their resentment over their father’s love of Petitioner [meaning Dana] and her role in his life.” She further argues that a manager should be appointed to assist in making “significant decisions” regarding Tom’s estate – and specifically references Adria’s “erratic behavior, which has included sending threatening emails to the members of the band and blocking the release of recordings, which has jeopardize business dealings.”
After quite a bit of fighting and slinging not very nice things about each other, SOMETHING happened because really the next big update came some time later (in 2019) when it was released that Dana, Adria, and Kim reached a settlement agreement and agreed to serve as equal participants. In a joint statement (hey, good for them!), they said, “We are pleased to announce the formation of Tom Petty Legacy LLC to manage all aspects of Tom’s legacy. We are committed to honoring Tom’s voice, music, integrity, and his charitable spirit.” The statement further shared that they “have resolved their differences and dismissed all litigation matters that had been filed related to Tom’s estate. Each of them sincerely regrets that in their intense grief over Tom’s tragic death, actions were taken that were hurtful to one another.”
You know what? I love that. All too often do I see and hear estate litigation like this – that emotions completely take over and cause sometimes-irrational decisions. Sadly, this estate world oftentimes ruins family relationships, relationships among the “one in charge” and beneficiaries, etc. Unfortunately, when emotions take over and rational decisions take the back seat, legal fees DRASTICALLY increase.
Here’s a crazy story for you – I was once involved in a case where the mother passed away, mother had two daughters who were inheriting. The two daughters started fighting … we got to the point where we sat our client down and said, “If we don’t settle or chill out, the only ones that are going to win in this case are us, the lawyers.” Our client looked at us dead in the eye and said, “I’d rather YOU get my mother’s money than my sister.” I am being 100% serious.
THAT is what I mean. Emotions over rationality. Yikes. And guess what? In that case, the legal fees COMPLETELY CONSUMED the estate. The only thing that our client got to say was that “she won.” Clearly, in that moment, that was more important to her than the money. I often wonder if she looks back and regrets that decision. Heck, maybe not – that is how deep some emotions run. Sad, but true.
So, with Tom’s estate, it actually makes me happy to see that Dana, Adria, and Kim settled and actually did so pretty quickly. It didn’t take years … decades … like we’ve seen with other celebrity estates. I don’t know enough about the case to know whether it was good lawyering (where the lawyers successfully talked both sides to chill out and find a happy medium) or if it was the clients (Dana, Adria, and Kim realizing that no one wins if they keep on fighting). Regardless, I’m so happy it happened.
So, beyond keeping emotions in check, what else can we learn from Tom’s estate? Well, a few things…
Well, words are important. They’re even MORE important in the law. I’m sure there was an idea, a reason Tom put Dana as the sole Trustee, but added the provision of including Adria and Kim in management. I often tell clients, especially when they try to add or make up things beyond what the words in the document say, that I have to stick within the four corner of the document. Period. End of story. So, it doesn’t matter if someone claims “Ohhhh, Dad did not really trust Dana…” (I’m saying this merely as an example of things I hear from real clients) … or “Ohhhh, Tom wanted to leave everything to the girls, but didn’t trust them to manage it…” Neither of those statements are in the document. To be totally frank, I don’t care. I care about the words.
Beyond that, it’s SUCH a frequently discussed topic on Legal Tea, but here we are with yet another blended family. While this situation did not end up as WWIII, it did still end up in Court (unnecessarily), extra legal fees were spent (because the Court involvement), words were said and feelings were hurt, etc. I think if you are part of a blended family, you have to try your absolute hardest to extract emotions and truly and deeply look into your personal situation – can your blended family honestly work well together after you pass?
If you even have the slightest feeling the answer MAY be “no” then consider naming someone else as the person in charge – name someone that is not related to any of the family and that has no “stake.” Sometimes, people will end up picking a third party – like a corporate trustee (think, a bank or financial institution), a professional (like a CPA, financial advisor/planner, or attorney), or a company that specializes in serving in these roles. Here, in Indiana, there’s been a few attorneys that have “come out” and said “Hey, I’ll serve as Executor, Power of Attorney, Trustee, etc.” Because so many clients of mine have asked for me to serve in this role, I have created and operate now from a LLC when I serve in that capacity. That’s how often I’m asked!
Yes, putting a third party as the “one in charge” comes with a cost – meaning they will charge the estate for their service. However, if things go array and people start suing each other, I can almost guarantee that the cost of the third party will be LESS than the legal fees from estate litigators in the lawsuits.
Okay, let’s wrap this episode up – next week we’re back to a “cautionary tale” episode where we talk about real-life clients, real-life cases (you know, not celebrity-level cases) that I, or my office, has personally worked on. So on next week’s episode, we’re going to be talking about estate planning with a farm (we are in Indiana, Ha!) – and the many, many excuses (yes, excuses) we hear when farmers choose to not do any type of succession planning for WHAT THE HECK happens to the farm after they pass.
Tune in for that next Tuesday, Legal Tea Listeners! Until then, take care and be well!