here is a cautionary tale unfolding in the press coverage of the death of Anna Nicole Smith. Rarely has an estate captured the imagination of the public to such a degree, so it is incumbent upon professionals engaging in financial and estate planning to set the record straight about the laws that apply, and encourage sound planning techniques.
To what inheritance is an afterborn child or pretermitted heir entitled? What effect does a negative bequest have? What legal claims survive a testator's death? What steps could have been taken to make the testator's wishes known?
It is our endeavor to respectfully separate fact from fiction. There are dispassionate rules of law that apply, so let us therefore review their impact.
Addressing Uncertainty
There has been rampant speculation about wildly divergent outcomes to the disposition of the AnnaNicole Smith estate. Uncertainty is antithetical both to sound estate planning and the system of laws that govern estates. How is it Ms. Smith can have an 18-page will (as yet not submitted to a probate court), and yet the disposition of her wealth remains uncertain?
Consider the legal skirmish that took place in Fort Lauderdale, Florida, in late February, 2007, over custody of the decedent's body. Parties from the Bahamas and Texas claimed custody of the body; other parties from California sought DNA from the body. Ultimately, custody was awarded to a court-appointed guardian for Ms. Smith's six-month-old daughter, Dannielynn Hope Marshall Stern.
Not all wills contain an instruction of burial or cremation but many do, and for good reason. Heirs in grief should not have to guess between burial and cremation, or where a body will be buried, or where cremated remains will be kept or disbursed. Where the will is silent for sake of privacy, a letter of instruction from the testator can settle the issues conclusively and avoid so much concern and conflict among grief-stricken heirs.
Obviously, a sound will should identify the beneficiaries and executors and provide for alternate bequests and fiduciaries if the intended persons have predeceased the testator. However, the will of Anna Nicole Smith utterly fails to provide unequivocal answers.
Was Dannielynn Disinherited?
Let's cut right to the chase. The late Anna Nicole Smith executed a 2001 California will that, as of the time this article is written, has not been probated, but that at face value leaves her entire estate in trust for her predeceased son, Daniel Wayne Smith, and that disinherits everyone else including future heirs.
The 18-page will, with table of contents, provides in relevant part as follows:
"I, VICKIE LYNN MARSHALL, also known as Vickie Lynn Smith, and Vickie Lynn Hogan, and Anna Nicole Smith, a resident of Los Angeles County, California, declare that this is my Will.
* * * * * * * * *
I am unmarried. I have one child DANIEL WAYNE SMITH. I have no predeceased children nor predeceased children leaving issue. Except as otherwise provided in this Will, I have intentionally omitted to provide for my spouse and other heirs, including future spouses and children and other descendants now living and those hereafter born or adopted, as well as existing and future stepchildren and foster children." (Emphasis added.)
There are some glaring omissions here. To state the obvious, a good will should anticipate and address as many scenarios and contingencies as possible. A primary beneficiary could predecease a testator so a will ordinarily would anticipate that contingency and provide several alternate beneficiaries. The same is true for executors; if the designated executor can't serve, the well-planned will, having anticipated that contingency, names a successor executor.
Here, the will of Anna Nicole Smith, otherwise known as a Vickie Lynn Marshall, has no "plan B" to fall back on when the primary plan of disposition failed. The will was written when the testator had one son, Daniel, but before her daughter, Dannielynn, was born. But Daniel predeceased the testator.
Ms. Smith died a few months later before she could revise her will. But it was not before she expressed her intent. The testator had the image of Dannielynn tattooed on her back before she died. Not your conventional holographic will, but the expression of intent here is unmistakable.
Nevertheless, the existing and yet-to-be probated 2001 will of Ms. Smith does not merely fail to mention Dannielynn, but rather purports to disinherit all other beneficiaries born after the execution of the will, specifically, "all those hereafter born."
Defining Dannielynn's Status
Several legal concepts and terms are applicable to the Smith estate:
Afterborn Children: This term has two meanings. The first is a child born after the death of the father, also referred to as a posthumous child. The second meaning, which is applicable here, is a child born after the testator executes the will. Anna Nicole's potential will was executed in 2001 and Dannielynn Hope Marshall Stern was born in 2006.
Pretermitted Heir: This term is also applicable since Dannielynn is an heir who is not provided for in the will…and someone who would inherit a share of the estate under terms of intestacy, but for the existence of the will.
Lapsed Gift: A gift to an heir or a beneficiary who has predeceased the testator "lapses," i.e., becomes ineffective. Many states have anti-lapse statutes based on section 2-605 of the Uniform Probate Code. Thus, in the absence of testamentary language to the contrary, descendants of the predeceased legatee inherit their ancestors' share by representation, much as if the testator had provided for them as alternate beneficiaries. Here, the 2001 will leaves everything to Daniel Wayne Smith, who predeceased the testator and had no descendants.
Negative Bequests: A clause intentionally omitting classes of beneficiaries is referred to as a "negative will," "negative bequest," or a "negative disinheritance." This is the most precisely applicable description of the status of Dannielynn under the terms of her mother's will. She is part of a general class of people who are intentionally not being included in the will. This is not the same thing as a specific disinheritance of a specific person.
Though rare, there is case law about the negative disinheritance language found in Anna Nicole Smith's 2001 will. In, Estate of Poisl, 280 P.2d 789 (1955), the Supreme Court of California, En Banc, ruled that a general disinheritance clause was ineffective as to an heir whom the clause failed to specifically mention.
In general, such clauses are not effective and end up being treated like "boilerplate" clauses that get gratuitously tacked onto wills but cause problems unless there are alternate beneficiaries. For a discussion, see "Models of the Will and Negative Disinheritance" by Frederic S. Schwartz, who argues against the rule, but summarizes it succinctly thus:
"Under the orthodox (and still almost universal) rule, such a disinheritance provision is ineffective. [T]he negative beneficiary will take his intestate share of that property. Thus, under the orthodox rule, a testator can prevent an heir from taking in intestacy only by making affirmative dispositions of all the testator's property."
However, see Estate of Hassell, 168 Cal. 287, 142 P. 838 (1914), in which the Supreme Court of California upheld the following clause: "Those of my heirs not herein mentioned has (sic) been omitted by me with full knowledge thereof." See also, Smith v. Crook, 160 Cal.App.3d 245 (1984), in which the California Court of Appeal ruled that extrinsic evidence of intent is not admissible, that the intent to disinherit must appear on the face of the will. Note: Such an expression would preclude inheritance under UPC section 2-302.
Missing Wills: Howard K. Stern, the attorney and companion of Anna Nicole Smith, testified that the original 2001 will of Ms. Smith had not yet been located, but that it may be in Ms. Smith's California residence. If the original will cannot be found, a determination will have to be made as to whether it was intentionally revoked or inadvertently lost. State jurisprudence varies, but there is generally a presumption that a missing will has been revoked and that presumption must be overcome by some demonstration of the testator's intentions, and some explanation of why the will is missing, such as a fire or papers lost during a move, etc.
A Dickensian Script
Scandals and conflicts over money make headlines, but the somber aftermath always plays out with a scrimmage of dark-suited attorneys at conference tables and in courtrooms. Like the interminable case of Jarndyce v. Jarndyce that opens Bleak House by Charles Dickens, the case of Marshall v. Marshall has endured for a decade and has now survived all of the original litigants. Sordid allegations, colorful characters, improbable plot twists, and heart-wrenching tragedies are interwoven in layer upon layer of irony in the true Dickensian tradition-though certainly not in a manner imaginable in the Victorian times of which Dickens wrote.
Still, there is a common thread of wealth and placement in society that connects these tales. Like the orphans in Oliver Twist or Pip in Great Expectations, the impoverished childhood of Vickie Lynn Hogan made the lifestyle of billionaire J. Howard Marshall an unattainable fantasy.
A Legacy For Estates
Vickie Lynn Hogan from Texas has done more than become a celebrity icon like Marilyn Monroe. Her estate has become a well-known example to a generation of people planning their will, much as the case of Terri Schiavo has influenced how a generation of people will utilize living wills.
She was portrayed as a gold digger, the pursuer of a billionaire's fortune, but it is now Anna Nicole Smith's estate that others attempt to exploit from every angle, and which now enters the same endless legal morass as Jarndyce v. Jarndyce and Marshall v. Marshall.
Note: The case of Marshall v. Marshall is ongoing, but has already left its mark by the U.S. Supreme Court putting the probate exception to federal jurisdiction to rest. A chronology of that case follows
Chronology of Legally Significant Events in the Smith Estate
Prelude: November 28, 1967: Vickie Lynn Hogan is born in Houston, Texas.
1971: Vickie Lynn Hogan changes her name to Nikki Hart after her mother remarried.
1985: Vickie/Nikki, age 16, marries Billy Wayne Smith.
1986: Vickie Lynn Smith gives birth to Daniel Wayne Smith.
1987: Vickie and Billy Wayne Smith separate. Vickie works at Wal-Mart, Red Lobster, and then as an exotic dancer at a nightclub.
1991: While working as a stripper at Gigi's in Houston, Vickie meets J. Howard Marshall II.
1992: Vickie Lynn Smith is on cover of the March issue and the centerfold of the May issue of Playboy, for which she became the 1993 Playmate of the Year.
1994: In June, after a two-year courtship, Vickie Lynn Smith (26) and J. Howard Marshall II (89) are married. In September, J. Howard Marshall II made gifts valued at $6 million to Vickie Lynn Marshall "in consideration of her marriage to me."
1995: In April, Vickie Lynn Marshall files suit against E. Pierce Marshall for tortiously interfering with her right to support and for violating his duty as trustee of J. Howard Marshall II's living trust. By August, J. Howard Marshall II had died, age 90, with assets valued at $1.6 billion.
1996: Vickie Lynn Marshall files for bankruptcy as a resident of California. E. Pierce Marshall intervenes in the bankruptcy action with a claim for defamation. Vickie Lynn Marshall counterclaims with a claim for tortious interference with expectancy of gifts. E. Pierce Marshall moves to have the case removed to a federal district court.
1999: A bankruptcy judge sanctions E. Pierce Marshall for discovery abuse by deeming the assertions of Vickie Lynn Marshall correct. A federal district court then vacates sanctions, but the Bankruptcy Court reenters the sanctions with explanation and bars E. Pierce Marshall from introducing evidentiary testimony of damages and rules that 1) the Texas Supreme Court would recognize the tort of tortious interference with an expectancy of a gift in trust if the issue were ever presented to it; 2) the probate exception to federal jurisdiction did not bar the tort claim; and 3) E. Pierce Marshall's defamation claims were denied.
2000: The Bankruptcy Court withdraws the sanctions order, sua sponte, but maintains other rulings. Later in 2000, the Bankruptcy Court makes express findings of tortious interference against E. Pierce Marshall and awards Smith $449,754,134 based on her right to inherit a portion of the Marshall fortune under a widow's election under Texas law. But then on October 6, 2000, the Bankruptcy Court issues a revised judgment in which the award is no longer based on the widow's election, but on the discovery sanctions. The court notes that the sanctions were based on specific findings that E. Pierce Marshall tortiously interfered by firing an attorney, conspiring with another attorney to make a trust irrevocable, and then making a 1982 trust irrevocable by amending it after J. Howard Marshall II's death. Vickie Lynn Marshall is awarded an additional $25 million as punitive damages for discovery abuses.
2001: After a five-month trial in the Texas probate proceeding, a jury concludes that J. Howard Marshall II had not been a victim of fraud, that he made his 1982 trust irrevocable, and that Vickie Lynn Marshall was not entitled to anything. Damages of $541,000 are awarded to E. Pierce Marshall. Meanwhile, a federal district court affirms the bankruptcy court's jurisdiction, but vacates the bankruptcy judgment because Vickie Lynn Marshall's claims were not "core" bankruptcy claims.
2001: On July 30, 2001,Vickie Lynn Marshall executes a will leaving her entire estate to her son and naming her attorney Howard K. Stern as the executor.
2002: After a de novo review, the federal district court confirms the Bankruptcy Court's findings that the Texas Supreme Court would recognize a tortious interference claim and that E. Pierce Marshall did interfere with a trust which J. Howard Marshall II had intended to establish on behalf of Vickie Lynn Marshall, but reduces the award to Vickie Lynn Marshall to $88.5 million.
2004: On December 30, 2004, the 9th Circuit Court of Appeals finds that all federal courts, including the bankruptcy courts, are bound by the probate exception to federal jurisdiction and affirms the Texas probate jury finding that no misconduct by E. Pierce Marshall had occurred. Marshall v. Marshall, 392 F3rd. 1118 (2004).
2005: The 9th Circuit refuses to reconsider its decision.
2006: In May, the U.S. Supreme Court reverses the 9th Circuit as to jurisdiction and remands the case, leaving open issues raised by both sides. Marshall v. Marshall,126 S.Ct. 1735, 547 U.S. ____ (2006). In June, E. Pierce Marshall died of an aggressive infection at age 67.
On September 7, 2006, Dannielynn Hope Marshall Stern is born in the Bahamas. Three days later, on September 10, 2006, Daniel Wayne Smith, age 20, dies in Vickie Lynn Marshall's hospital room from a lethal combination of drugs. Weeks later, on September 28, 2006, Vickie Lynn Marshall has a commitment ceremony with Howard K. Stern, her longtime attorney, photos of which are sold for $1 million.
February 8, 2007: Vickie Lynn Marshall dies in a hotel in Florida.
© R. Moshman 2007.
