Writing Your Tulsa Estate Planning Blog

In most states, to completely disinherit a child in a will, parents have to mention the child and specifically disinherit him or her. Otherwise, it is presumed that the child was left out by mistake. Tennessee has an exception to the rule.

J. Don Brock, the late CEO of Astec Industries, wrote many wills over the years. He executed new wills in 1994, 1998, 2006, 2012 and 2013. His first three wills all did different things with regard to his five adopted children.

They were given various amounts of money or cut out from receiving anything in the different wills. The last two wills did not mention the adopted children at all. They claim that was done by their stepmother, in order to preserve the assets of Astec Industries for herself.

The children filed a lawsuit against the estate, but lost in the lower courts. The Supreme Court of Tennessee has now agreed to hear their case, according to the Times Free Press in “Tennessee Supreme Court agrees to hear J. Don Brock estate challenge.”

The main issue in this case is a 110-year-old decision by the Supreme Court of Tennessee that created what is known as the Cowan Rule. It limits the ability of potential heirs to challenge a will, if they were not mentioned in the previous will.

The adopted children lost in the lower courts because they were not mentioned in the 2012 will. The rule makes some sense.

Why?

Merely having the 2013 will ruled invalid would not create an inheritance for the children, since it would just validate the 2012 will, unless it is also successfully challenged.

However, this is not how other states handle disinherited children.

In other states, it is presumed that if a child is not mentioned in a will at all, it was a mistake and the child can challenge the estate, regardless of what an older will might state.

Reference: Times Free Press (March 21, 2017) “Tennessee Supreme Court agrees to hear J. Don Brock estate challenge.”

Audrey Hepburn’s estate planning mistake has led to a long legal fight between her sons. It appears that they have finally reached an agreement.

Audrey Hepburn starred in some of the most beloved movies of all time. She came to symbolize beauty and grace in mid-century Hollywood.

When she passed away in 1993, she left behind a gigantic amount of memorabilia from her acting career, including some of the costumes and jewelry that she wore in her iconic roles. These items have obvious value to collectors, but so far no one has gotten their hands on them.

Why?

The items have been the source of a long dispute between her two sons.

Hepburn specified in her estate plan that everything she owned should be split between those sons equally, but she left no instructions regarding just how that was to be accomplished.

Which son should get which item?

Her memorabilia has been contested in court for the last two years, but the sons may have finally reached an agreement, according to the Daily Mail in “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

The sons have agreed to submit the question to mediation and use that process to determine the distribution of particular pieces of memorabilia. However, this will not be the end of all battles concerning Hepburn’s estate, since a charitable fund she founded is now suing one of the sons for interference with its affairs.

Hepburn’s mistake was not including some way for her son’s to resolve any disputes about who gets what in her estate plan. She could have made provisions for a mediator to resolve the disputes. That would have saved a lot of headaches and legal bills for her family.

Reference: Daily Mail (March 9, 2017) “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

Family battles over an estate are not uncommon. While there can be several different reasons for these fights, there are a few reasons that are the most common.

Most of the time, litigation over an estate pits family members against family members. If there is a large sum of money involved, people have many reasons to possibly fight over what they consider to be their fair share. Sometimes these family battles just happen because family members do not get along with each other.

On the other hand, there are some common reasons for these fights as Wealth Management recently listed in “Five Reasons Families Fight over Estates,” including:

•When one sibling lives close to their parents and another lives a great distance away, leaving the sibling who lives closest more assets can lead to disputes.

•If a wealthy person gets remarried later in life and leaves a large portion of the estate to the new spouse, fights between that spouse and children from previous relationships are common.

•Any blended family situation can lead to family battles over estates, if proper plans have not been made.

•When wealthy people leave large sums to a trusted caregiver, then it is likely the family will fight with the caregiver over those assets.

•If the wealthy person has not adequately prepared and drawn up proper estate planning documents, then family fights over the estate are very likely.

Reference: Wealth Management (Jan. 30, 2017) “Five Reasons Families Fight over Estates.”

A high-profile case involving the estate of a wealthy Atlanta businesswoman is currently stalled, as other legal battles play out around it.

Diane McIver was a well-known and wealthy businesswoman from Atlanta. In the fall of 2016, she was sitting in the front passenger seat of a vehicle being driven by her friend. What happened next is disputed and has been the subject of considerable media speculation in Georgia.

Her husband Claude McIver was sitting in the vehicle directly behind her. He claims that he had a gun in his lap, because they were driving in a bad neighborhood. According to him, the car hit a bump in the road, which startled him and caused him to accidentally discharge the weapon killing his wife. The driver of the vehicle says the car was stopped, when she heard the gun go off.

Claude McIver has been charged with involuntary manslaughter.

If that was not enough to make administering the estate difficult, one of Diane McIver’s companies is suing her estate. The company claims that it loaned $1 million to one of her other companies that she personally guaranteed.

This story is reported by Private Wealth in “Estate in Limbo after Atlanta Man Is Charged with Killing His Rich Wife.”

The exact details of Diane McIver’s will are not known.

Ordinarily, her husband would be entitled to some portion of her estate. However, people who kill someone are not typically allowed to inherit from their victims. That would mean that another heir would need to be found.

Of course, depending on the results of the lawsuit filed against the estate by the company, there might be nothing left for anyone to inherit. This is especially true, if more debts are found to exist.

Regardless, this case will give the media in Georgia something to talk about for a long time.

Reference: Private Wealth (Feb. 2, 2017) “Estate in Limbo after Atlanta Man Is Charged with Killing His Rich Wife.”

Estate executors and personal representatives have a duty to the estate to pursue any causes of action that the estate might have, but what if that means they have to sue themselves? A case in Utah answers that question.

If a deceased person or the estate of that person has reasonable legal recourse against some other person or entity, then it is ordinarily the duty of the estate’s representative to pursue that action in court. However, a recent case in Utah shows how that can lead to interesting results.

A man died in a one-vehicle accident when his common law wife was driving. The wife was the man’s sole heir and was named the personal representative of his estate. In that capacity, on behalf of the estate, she filed a lawsuit against herself for wrongful death. Then, in her capacity as an individual and the defendant in the wrongful death case, she moved to dismiss the case on the grounds she could not sue herself.

The trial court dismissed the lawsuit.

The grounds?

Public policy prevents someone from suing themselves.

However, the Utah Supreme Court reversed that and allowed the wrongful death lawsuit to continue.
The Wills, Trusts & Estates Prof Blog discussed this case in “Case Summary on Suing Yourself as Personal Representative for Wrongful Death.”

At first glance, this might seem ridiculous and pointless, since the woman is the sole heir. Even if the estate collects money from the lawsuit, it would just go to her. However, there are a couple of things that could be going on here.

Before any heirs receive their inheritances from the estate, any debts of the deceased have to be paid. It could be that the estate cannot cover the man’s debts, unless judgment is obtained against the woman.

Another possibility is that the woman had insurance at the time of the accident. In that case, the insurance company might be required to indemnify her if she is held liable for wrongful death.
Thus, the estate would not really be collecting from her. It would be collecting from the insurance company.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 22, 2016) “Case Summary on Suing Yourself as Personal Representative for Wrongful Death”

It is sometimes beneficial to bring a lawsuit in federal court instead of a state court. One example would be if you want to sue a trust and fear that the state courts will have prejudice for a home state trust.

Trusts are ordinarily a matter of state law. They are created under the laws of a state. That would normally mean that to sue the trust, you have to go to the courts of the state it was created in. However, there are times when it might be better to sue a trust in federal court.

This might happen if the plaintiff is from out of state and has a legitimate fear that the state courts will favor the trust and its local trustees.
The Wills, Trusts & Estates Prof Blog wrote about one such case in “Trustee Citizenship Regulates Federal Diversity Jurisdiction.”

The plaintiff was a citizen of Taiwan suing a trust that her ex-spouse set up. She was seeking to recover assets from it. While it is not clear why she did not want to sue in state court, she did choose to file suit in federal court.

However, federal courts have limited jurisdiction. Not every case can be heard in federal court.

One way to get jurisdiction in federal court is called diversity jurisdiction. In order for it to apply, the plaintiff and the defendants have to be residents of different states or countries. In this case, the court decided that diversity jurisdiction was appropriate because the trust was a traditional trust not capable of suing or being sued on its own.

The citizenship of the defendants was thus the home states of the trustees.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 14, 2016) “Trustee Citizenship Regulates Federal Diversity Jurisdiction.”

As expected the dispute between Prince’s estate and Jay Z has resulted in a lawsuit.

How Prince’s estate will manage to pay its hefty estate tax bill has been a source of much speculation. It was assumed that one way to do so would be to sell the rights to Prince’s unreleased recordings. Rapper Jay Z had offered a reported $40 million for those rights. However, the estate turned that offer down and it has come up with a possibly different answer.

It can raise money by suing Jay Z, as it hinted it might do in a statement made after rejecting Jay Z’s offer.
Through Prince’s record label a lawsuit has been filed against Jay Z’s company Roc Nation, according to TMZ in “Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label Sues.”

The lawsuit alleges that prior to his death, Prince had negotiated a deal with Jay Z to allow Jay Z to stream Prince’s last album on the Tidal service, which Jay Z owns through Roc Nation. However, instead of just streaming that album, Jay Z assumed that he had permission to stream all of Prince’s music and in June of this year began streaming all of Prince’s best-known songs.

The lawsuit does not state the amount of damages that the record label is seeking, but it is likely to be extremely high given the popularity of Prince’s music.

This is a case that both copyright attorneys and estate planning attorneys will keep a close eye on. The latter will be interested to learn if it sheds some light on how Prince’s estate plans to pay estate taxes.

Reference: TMZ (Nov. 15, 2016) “Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label Sues.”