Celebrity Legacies: The Anna Nicole Smith Estate Battle (a/k/a The Case That Never Ends)

Celebrity Legacies: The Anna Nicole Smith Estate Battle (a/k/a The Case That Never Ends)

So how long exactly does it take to resolve the dispute over the estate of an 89-year old Texas oil tycoon who married a 26-year old stripper and Playboy Playmate?  Shouldn’t the case end when both the stripper (Anna Nicole Smith) and her “step-son” (Pierce Marshall, who was 27 years older than she was) die?  Anna Nicole Smith Estate

And is this really important enough to be heard by the United States Supreme Court, not once, but twice?

This is installment #3 of our weekly Estate Planning Lessons From The Stars series, which is based on the Celebrity Legacies TV show for which we provide commentary as the estate legal experts.  See other articles in the series here.

While we monitor, write about, and provide commentary for media outlets around the country about many complicated celebrity estates, this one takes the prize.  We call it “The Grand-Daddy Of All Estate Battles.”  We’ve written several articles about this case so far, which you can read here.

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How The Anna Nicole Smith Estate Battle Began

To summarize, J. Howard Marshall’s son, Pierce, inherited everything — about $1.6 billion.  That is, he did until Anna Nicole Smith challenged the estate plan (as did Pierce’s brother, J. Howard Marshall, III) in Texas probate court.

But Anna Nicole filed for bankruptcy in the federal court system in California.  Pierce then sued Anna Nicole for defamation in the California bankruptcy case (big mistake there), which opened the door for Anna Nicole to counter-sue Pierce Marshall.

In the counter-suit, Smith claimed that Pierce wrongly interfered with her expected inheritance, by tricking and otherwise preventing her loving husband from leaving her any money. Anna Nicole alleged that her elderly hubby was going to create a trust for her that would include one-half of the value by which his assets appreciated during their 14-month marriage (including a robust rise in the value of Koch Industries stock).

In part due to Pierce Marshall’s alleged altering, destroying, and hiding evidence in the case, Anna Nicole won in bankruptcy court (to the tune of $475 million).  With that victory in hand, she dropped the case in Texas probate court … or, at least, she tried to.  Pierce asked the Texas jury and probate judge to decide the case, despite Anna Nicole’s attempt to back out of it.  The jury and probate judge ruled for Pierce and against Anna Nicole Smith (and against J. Howard III, too).

So this of course led to a conflict — one court ruled in favor of Pierce and one in favor of Anna Nicole.  Which ruling should win out — the one from the California bankruptcy case (and subsequent federal court case that upheld $88 million of the judgment in Anna Nicole’s favor) or the Texas probate case?

That question has taken years … and years … to resolve, including two separate trips to the United States Supreme Court.  During the second trip, the highest court in our country analyzed complex bankruptcy and jurisdictional laws, at great length, to side with Pierce Marshall and against team Anna Nicole.  By then, both Pierce and Anna Nicole had passed on, but their two estates kept fighting each other.

The Current Status of The Estate Battle

Then, in 2013, the California federal court judge issued a new ruling in favor of Anna Nicole Smith’s estate and against Pierce Marshall’s estate.  But that new ruling was put on hold.  The California judge was unsure what to do with the conflict between the Texas court’s ruling in Pierce’s favor, the lengthy delays which made it difficult for both sides, but balanced against his own beliefs that Pierce committed significant wrongdoing during the California proceedings.

Eventually, earlier this week, the California court decided to reverse its prior ruling and dismiss the sanctions request against Pierce’s estate.

But that didn’t end the battle, contrary to popular belief.  It only ended the California proceedings, but Anna Nicole Smith’s estate still had the right to an appeal of the Texas court.  That appeal was put on hold years ago, until the California court process was concluded.

Anna Nicole’s legal team recently asked a Texas appellate court to reverse the Texas probate verdict, which would allow the California rulings to be reinstated.  At least, they could — if that appeal wins and doesn’t get overturned by an even higher appellate court.  If that happens, then the entire basis by which the Supreme Court ruled against Smith would be thrown out of the window, because then the California ruling should take precedence.

Complicated?  You bet.  Almost over?  Not even close.  After 19 years, the battling still has another two to three years to go, if not longer.

If this isn’t a lesson for 89-year olds to stay out of strip clubs, then we don’t know what is!

The Trial & Heirs Lesson

It’s also a lesson in how costly probate litigation feuds can become.  While 19+ year-long battles don’t usually happen (except when more than a billion dollars is on the line of course), even modest estates can face estate battles that last a year or two, not counting any appeals.  It happens all the time in our country, and not just to estates of the rich and famous.

While nothing can absolutely prevent an estate fight from happening among your heirs, the best thing you can do to minimize the chances is thorough estate planning with a good attorney, experienced in drafting wills and trusts.

Pierce Marshall convinced his father to sign new estate planning documents, with the help of his father’s estate planning attorney, who has been accused of serious fraud multiple times (and who referred to Anna Nicole Smith as “Miss Cleavage”).  If J. Howard Marshall had employed a better estate planning attorney, then this feud may have been avoided — and the oil tycoon’s true wishes (whatever they may have been) could have been honored without years and years of expensive litigation.

You can learn more about Anna Nicole Smith’s Estate and the fight for the oil tycoon’s fortune in the next episode of Celebrity Legacies, on the Reelz channel.

Celebrity Legacies is a documentary series airing on the Reelz cable channel, Tuesday nights at 10 p.m. and Sundays afternoons, featuring Danielle and Andy Mayoras and other experts, to explore the lives, legacies, and estates of a different celebrity each week.

Danielle and Andrew Mayoras are co-authors of Trial & Heirs: Famous Fortune Fights!  For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update.  You can “like” them on Facebook and follow them on Twitter and Google+.

Categories: Andrew and Danielle, Celebrities, Estate Battles, Probate Court, Trusts
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