Wills, Trusts & Estates Prof Blog

Estate planning lessons from the $600M fight over Michael Jackson’s music catalog

Michael Jackson's estate has faced ongoing legal challenges and tax disputes since his death in 2009, despite the continued financial success of his music. A significant event occurred in August 2024 when a California court approved the $600 million sale of Jackson’s music catalog, despite objections from his mother, Katherine Jackson, who argued that Michael never wanted his assets sold.

Jackson’s will, signed in 2002, left most of his estate to his children through a trust and granted his executors the authority to sell assets. Katherine Jackson's challenge was dismissed because the court determined that Michael’s will allowed such sales, emphasizing the importance of formally documenting wishes in a will.

The situation underscores the importance of clearly defined wills and the broad powers often granted to executors. It also provides lessons for estate planning, advising that wills should be carefully drafted with an understanding of executor powers. Imposing restrictions on asset sales can create challenges and may not align with future circumstances, as shown in a similar case involving Joseph Pulitzer. Ultimately, estate plans must be formalized in writing and carefully considered to avoid posthumous disputes and unintended consequences.

For more information see The Conversation's "Estate planning lessons from the $600M fight over Michael Jackson’s music catalog" Theconversation.com, August 28, 2024. 

Special thanks to Naomi Cahn (University of Virginia School of Law) for bringing this article to my attention.

Woman’s daughter, son-in-law charged with exploitation at nursing home

Authorities say a Clay County woman’s daughter and son-in-law threatened to leave her in a nursing home until she signed over all her property and power of attorney to them, and earlier had filed paperwork to obtain deeds to her land, home and mineral rights.

The charges alleging exploitation of an elderly person and making false statements to obtain property were filed after the victim obtained an attorney who notified the sheriff’s office of the alleged attempts to obtain control of the woman’s property in Joy while she was in a care center in Henrietta.

She said her son-in-law came to take her home on the day she was to be released but asked her to sign some documents before leaving the center. The documents would have relinquished her home, property, and mineral rights, which were worth more than $300,000, to the couple.

She said she declined, and William became angry and said that if she did not sign, he would leave her in the center until she did, and she would have to pay her bills from the center. Then he left her.

Authorities say medical records show the victim is fully competent to manage her affairs and that Adult Protective Services advised they are opening a case of criminal activity against the couple on the victim’s behalf.

For more information see Larry Statser "Woman’s daughter, son-in-law charged with exploitation at nursing home" SmartNews, August 8, 2024.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

August is "National Make a Will Month"

August is National Will Month, a time dedicated to raising awareness about the importance of having a will. This observance encourages individuals to consider the legal, financial, and personal benefits of drafting a will. By highlighting the significance of wills, National Make a Will Month aims to reduce the number of people who pass away without one, ensuring that their assets are distributed according to their wishes and minimizing potential conflicts among surviving family members.

A will is a crucial legal document that outlines how a person's assets and affairs should be handled after their death. Without a will, the distribution of an individual's estate is left to state laws, which may not align with their personal desires. Having a will provides several key benefits. It allows individuals to specify how their assets should be divided, ensuring that their beneficiaries receive what they intended. This can include financial assets, property, personal belongings, and other valuables. A will can designate guardians for minor children, providing clear instructions on their care and making provisions for dependents with special needs. By clearly outlining one's wishes, a will can help prevent disputes among family members and potential legal battles over the estate. Additionally, a will can appoint an executor to manage the estate, ensuring that the deceased's affairs are handled smoothly and in accordance with their instructions.

Creating a will is a straightforward process that ensures your assets are distributed according to your wishes and provides peace of mind. Start by listing your assets and deciding on their distribution, including guardianship for minor children if necessary. Choose a trustworthy executor to manage your estate. You can draft your will with the help of an attorney or use online tools. Ensure your will is signed and witnessed according to state requirements, and consider having it notarized for added authenticity. Store the original will in a safe place, such as a fireproof safe or secure deposit box, and inform your executor and close family members of its location. By taking these steps, you can create a legally binding document that protects your loved ones and honors your wishes.

Article: Ademption of Gifts of Partnership Shares; Executor Removal

Harmish Mehta (Radcliffe Chambers) and Daniel Burton (Radcliffe Chambers) recently published, Ademption of Gifts of Partnership Shares; Executor Removal, 2024. Provided below is an Abstract:

In Lane v Lane the High Court ruled on whether a testamentary gift of a “share and interest” in a partnership adeemed on the basis that, at the time of death, the partnership had been dissolved but not yet wound up. The ruling appears to be the first consideration of such a question. The court also ruled on a claim for the removal of an executor. The judgment of Jonathan Hilliard KC (sitting as a Deputy Judge of the High Court) contains illuminating observations on partners’ rights in a partnership, the court’s approach to the removal of personal representatives and the interaction between the interpretation of wills and the doctrine of ademption.

This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in Private Client Business, Issue 3, 2024, and is reproduced by agreement with the publishers. For further details, please see the publishers’ website.

The Secret Battle for the Future of the Murdoch Empire

Rupert Murdoch, 93, is engaged in a confidential legal struggle with three of his children over the control of the family's media empire. The conflict began when Murdoch attempted to amend the irrevocable family trust to ensure his eldest son, Lachlan, would maintain control after his death, preserving the company's conservative stance. This move blindsided his other three older children—James, Elisabeth, and Prudence—who united to oppose the change. Lachlan supports his father's efforts, setting the stage for a courtroom showdown in Nevada.

Murdoch argues that Lachlan's sole leadership is essential to protect the company's conservative editorial direction and, consequently, its commercial value. In contrast, the opposing siblings view this attempt as a violation of the trust's original equal governance provision. The Nevada probate commissioner ruled that Murdoch could amend the trust if he proves his actions are in good faith and benefit all heirs. A trial to decide this matter is scheduled for September.

The family's internal dynamics have long been complex, with past rivalries and political disagreements. Lachlan's alignment with his father's conservative vision contrasts sharply with the more moderate views of his siblings, particularly James, who has distanced himself from the family business due to disagreements over its direction. The trust, originally designed to ensure equal control among Murdoch's four oldest children, is now a battleground as Murdoch seeks to consolidate power in Lachlan's hands.

Murdoch's efforts to amend the trust have further estranged him from James, Elisabeth, and Prudence, leading to a fractured family dynamic in his final years. The outcome of this legal battle will determine not only the future leadership of the Murdoch media empire, which includes Fox News and The Wall Street Journal, but also its political influence. As Murdoch attempts to secure Lachlan's dominance, the trial will scrutinize whether his actions truly serve the best interests of all his heirs.

For more information see Jim Rutenberg and Jonathan Mahler "The Secret Battle for the Future of the Murdoch Empire" New York Times, July 24, 2024. 

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

Wendy Williams’ best friend: ‘I want proof of life’

Regina Shell is deeply worried about the well-being of her best friend, Wendy Williams, who she hasn't heard from in over a year. Williams recently turned 60 and is under court-ordered guardianship following her diagnoses of primary progressive aphasia and frontotemporal dementia. Shell, appearing on NewsNation’s “CUOMO,” expressed her distress over the lack of communication and visibility of Williams, emphasizing her desire for proof that Williams is alive and well.

Earlier this year, a documentary titled “Where Is Wendy Williams?” was released, which attempted to document Williams' life and struggles. However, the documentary has faced criticism, particularly from Shell, who was unaware of its contents prior to her participation. The producers later acknowledged they would not have proceeded had they known about Williams’ health condition during filming. This documentary coincided with the announcement of Williams’ medical diagnoses and her departure from “The Wendy Williams Show,” sparking further concern and speculation.

Shell recounted troubling instances where Williams was deprived of access to her finances, leading to delays in obtaining necessities like food. She highlighted the difficulties Williams faced due to the guardianship, needing to rely on others for basic needs. Shell also expressed doubts about the integrity of the appointed guardian, referencing legal allegations against them. This situation has compounded Shell's fears for Williams' safety and well-being.

For more information see Liz Jassin "Wendy Williams’ best friend: ‘I want proof of life’" NewsNation, July 19, 2024.

The viral $488,000 San Francisco home has a buyer — and the deal exposes a dramatic backstory

The headlines were buzzing: a three-bedroom home in San Francisco's Russian Hill was listed for an unbelievable $488,000. The catch? A tenant was paying just $417 a month under a lease that lasted until 2053. Despite this unusual setup, the house got several offers, some even higher than the asking price. Surprisingly, the accepted offer came from Cheryl Lee, who lives there with her mom, Sandra. This property has sparked a family feud, reminiscent of past high-profile inheritance disputes in the area.

The home, located at 30 North View Court, was built in 1924 and bought by Florence and Kenneth Goo in 1968. They placed it into a family trust in 1991. After Florence passed away, the trust split into two. The current owners are the Kenneth Goo Family Trust-B and the Koon K. Goo Revocable Trust. Trusts are common in estate planning since they let assets transfer directly to heirs, bypassing probate. Todd Lee, appointed as trustee by his grandfather Kenneth in 2020, chose Cheryl's offer despite higher bids because of family ties and responsibilities.

A big part of this story is the long-term lease signed by Kenneth Goo before he died in 2022. Originally signed in 2019, the lease required the tenant to cover property taxes and insurance, ensuring Cheryl and possibly Sandra had a place to live. In 2021, the lease was amended to cap payments at $5,000 annually and extend the term to 2053. This lease also allowed subleasing, benefiting Cheryl financially. Legal experts confirmed the lease’s validity, making eviction or a more profitable sale tricky.

The sale has revealed deep family issues, with allegations of mismanagement. Sandra Lee opposed the sale, accusing her son Todd and her brother Cedric of mishandling the trust and legal fees. Todd denies these claims, saying he’s just trying to do his job as trustee amidst financial strain. The trust’s funds were depleted after Kenneth's death, putting more pressure on the family. A property reassessment also raised taxes significantly, adding to their financial burden.

Figuring out the sale of the house depends on settling these family disputes and financial issues. Selling the house without tenants could get around $1.8 million, but the current situation lowers its value. If Sandra and Cheryl’s bid is accepted, they’d own a potentially valuable asset, while Cedric's share would be much less. This ongoing family drama highlights the complicated and emotional nature of handling inherited properties.

For more information see Kathleen Pender "The viral $488,000 San Francisco home has a buyer — and the deal exposes a dramatic backstory" San Fransisco Chronicle, June 29, 2024. 

Special thanks to John O’Grady (Attorney, San Fransisco, California) for bringing this article to my attention.

Article: How Wrongful Death Statutes Can Kill an Estate Plan: Part 2

Noel Brock (Eastern Michigan University) recently published, How Wrongful Death Statutes Can Kill an Estate Plan: Part 2, 2024. Provided below is an Abstract:

A study of considerations for minor beneficiaries and guardian choice, and suggestions for statutory change. This article is a continuation of Part 1 of the article, which appeared in last month's issue. A Not-So-Perfect Solution: Bifurcated Guardianship *1 As mentioned in Part 1, parents facing the daunting task of deciding who to name as guardian of their minor child(ren) upon their death or disability inevitably (and rightfully so) focus on the nurturing aspects of guardianship. They ponder 'who has my values and will teach my child the things I would have taught my child,' 'who do I trust to be stable and patient enough to raise my child,' 'who has the resources to assume financial responsibility for my child, ' and so on. These are all qualities that a guardian of a minor child's person would hopefully need to possess. What many parents and, in the authors' experience, even many practicing lawyers and State court judges do not realize is that all States and the District of Columbia allow for the appointment of at least two guardians for minor children: (1) a guardianship affecting personal interests, known as a guardianship of the person (a custodial guardian), and (2) a guardianship affecting property interests, known as a guardianship of the estate (a financial guardian).

Women are set to inherit trillions of dollars in the great ‘horizontal wealth transfer’

In the coming years, up to $9 trillion is expected to be transferred to spouses and partners as part of a phenomenon termed "the horizontal wealth transfer," according to a new UBS report. Over the next 20 to 30 years, baby boomers and older generations will pass down approximately $84 trillion to charity and family, with younger generations like Generation X, millennials, and Generation Z receiving the majority. Because women generally outlive men, much of this wealth transfer will initially go to surviving spouses, predominantly women, before eventually reaching the next generation.

The report highlights that the money will be transferred from one spouse to another within the same generation. This intra-generational transfer, or "horizontal wealth transfer," is expected to reshape wealth management, investing, and luxury spending, areas traditionally dominated by men. Most significant horizontal wealth transfers will occur in America, where over 43 million people aged 75 and above possess over $50 trillion in combined transferrable wealth. The typical inheriting spouse will manage this wealth for about four years before passing it on.

This shift contributes to the "feminization of wealth," with women's incomes and inheritances increasing, making them a growing segment of high net-worth investors and consumers. Women now constitute over 11% of the world's millionaires, a figure that has nearly doubled since 2016. Wealth management is seeing significant changes as well, with 45% of UBS’s clients now being women. A McKinsey report predicts that women will control most of the $30 trillion in baby boomer wealth by 2030, signaling a profound shift in financial decision-making. Additionally, luxury brands and philanthropy are adapting to this new dynamic, with increased focus on women’s preferences and causes.

For more information see Robert Frank "Women are set to inherit trillions of dollars in the great ‘horizontal wealth transfer’", CNBC, July 12, 2014.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

Delaware judge refuses to dismiss lawsuit in battle over estate of the late pop icon Prince

A Delaware judge has refused to dismiss a lawsuit filed by former business advisers to the late pop music icon Prince against two of his siblings and other heirs in a dispute over his estate. The judge on Friday also agreed with plaintiffs that an agreement purporting to replace them as managers of a limited liability company established by three siblings was invalid.

Prince died of an accidental fentanyl overdose in 2016. He had no will, and his six siblings inherited equal interests in the estate. Three of them assigned their combined 50% interest to Prince Legacy LLC. They also granted McMillan and Spicer each a 10% interest in Prince Legacy, along with broad and exclusive management authority.

One of Prince's sister, Sharon Nelson, later regretted the decision and led an effort to remove McMillan and Spicer as managing members by amending the LLC agreement. But as a matter of contract law, the judge ruled the only reasonable interpretation was that the terms of the initial agreement prohibited the defendant's attempt to amend the agreement.

The lawsuit alleges among other things that Sharon improperly tried to insert herself into management decisions and once demanded that the entire staff of the Paisley Park Museum in Minnesota be replaced. She also accused McMillan and Spicer of fraud and tried to sell her interests in Prince Legacy without the required consent of the other members.

The lawsuit is part of a long and convoluted legal battle involving both the size and the beneficiaries of Prince’s estate. In 2022, nearly six years after his death, the Internal Revenue Service and the administrator of the estate agreed to end a court battle and value the estate at roughly $156 million.

For more information see Randall Chase "Delaware judge refuses to dismiss lawsuit in battle over estate of the late pop icon Prince", AP, July 5, 2024.