On March 19, 2010, the United States Court of Appeals for the 9th Circuit ruled against the Estate of Anna Nicole Smith on her claim against the Estate of J. Howard Marshall. The wealthy oil tycoon had a will and a living trust that left almost all of his estate to his youngest son, E. Pierce Marshall. His will and living trust left nothing to Anna Nicole Smith, even though she was married to Marshall at the time of his death. At the time, she was known as Vickie Lynn Marshall.To reduce the cost of probate or avoid probate, J. Howard Marshall had placed the bulk of his assets in a revocable living trust. At the time of his death, the primary beneficiary of the living trust was E. Pierce Marshall. Marshall also made a will which contained pour-over provisions directing that his probate estate be distributed to his living trust. After marrying Smith, Marshall executed documents making his living trust irrevocable. He did not name Smith a beneficiary of his will or living trust, nor did he make any other provisions for her in his estate plan. He did, however, bestow lavish gifts on Smith, including real estate, cash, and personal property reportedly worth somewhere in the range of $7 million.The 9th Circuit Court ruled in Marshall v. Stern that Anna Nicole Smith’s estate is not entitled to receive any distribution from J. Howard Marshall’s estate, which is estimated to be worth $1.6 billion. This is a much different result than previous court decisions in this estate dispute which had awarded Smith millions of dollars.
Marshall’s heirs have been battling over his fortune for nearly 15 years. Both of the original parties to the case are now deceased. The fight over his estate is now being carried on by Howard K. Stern, executor of Smith’s estate, and Elaine T. Marshall, executrix of E. Pierce Marshall’s estate.The legal arguments surrounding Marshall’s estate plan have already been heard by the United States Supreme Court. This most recent decision by the 9th Circuit was rendered after the nation’s highest court remanded the case to the 9th Circuit after determining the lower court had construed the probate exception to its subject matter jurisdiction too broadly. The dispute over Marshall’s estate has been heard in several different types of courts, including bankruptcy court and probate court. There are many different claims in the case and the legal battle between the heirs is too lengthy to summarize here. To read the entire opinion issued by the 9th Circuit on March 19, 2010, visit the website of the
United States Courts for the Ninth Circuit.
Prevent Will and Trust Disputes
What steps could someone in J. Howard Marshall’s position have taken in his estate plan to prevent his wife from inheriting more than her elective share and avoid a costly will and trust dispute among his heirs? If you have an heir intent on filing a claim against your estate, it can be difficult to prevent, even with the best estate plan. Furthermore, if your estate is worth anything close to $1.6 billion, there is so much an heir can possibly gain that a will contest is likely, even after the proper steps are taken to disinherit an heir. Nevertheless, if you own a significant amount of property, have children from a prior marriage, and enter a new marriage or relationship, there are several steps you can take to ensure your estate is distributed to your intended beneficiaries. These steps include:1. Use an experienced estate planning attorney to prepare your estate plan. Make sure your attorney is fully aware of your concerns about a will contest so he or she can include appropriate language to achieve your objectives. See finding an attorney.2. If you intend to disinherit a spouse, child, or another heir, you should specifically mention that person by name in your will and state your reasons for the disinheritance.3. Consult an estate planning attorney regarding the elective share such disinherited heir may be entitled to inherit under the laws of your state, and plan your estate accordingly. See spousal share.4. Include a no-contest clause in your will, and ensure the heir you are trying to disinherit has a significant amount to lose by challenging your will.5. Consult your attorney about having your will signing videotaped. If your attorney recommends it, arrange for a professional to videotape your will signing.6. If there is any possibility an heir could claim you were subject to undue influence or lacked competency to make a will, ask your attorney to include competency questions in your estate planning documents to demonstrate your competency at the time of executing your estate plan.
Update on the Marshall v. Stern Case
On September 28, 2010, the United States Supreme Court announced it will hear an appeal by the estate of Anna Nicole Smith in the Marshall v. Stern case. This is the second time the nation’s highest court has agreed to hear an appeal in this long-running estate litigation.
The 9th U.S. Circuit Court of Appeals ruled against Smith’s estate in March of 2010. Now, Smith’s heirs will have another opportunity to pursue their claim against the estate of the late J. Howard Marshall. The Supreme Court is expected to hear the case in late 2010 or early 2011.