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Heirs continue legal fight in Anna Nicole Smith case

by | Feb 16, 2017 | Estate Planning |

Some readers may remember the probate fight involving former model Anna Nicole Smith and the estate of her deceased husband, Texas billionaire J. Howard Marshall. Smith married Marshall in 1994 when she was 26 and he was 89. When he died the following year, Smith was not named in his will. She challenged the will unsuccessfully in a Texas probate court. She later filed for bankruptcy in California, and argued in that proceeding that Marshall’s eldest son, Pierce Marshall, had improperly prevented his father from leaving an inheritance to her.

The bankruptcy court awarded Smith $474 million. A federal appeals court overturned the award, ruling that a federal bankruptcy court did not have jurisdiction over a case that had already been decided in a state probate court. The case went to the U.S. Supreme Court, which ruled in 2006 that the federal bankruptcy court did indeed have such jurisdiction.

Pierce Marshall and Smith both died within a year after the U.S. Supreme Court’s decision. But their deaths did not bring an end to the case. Pierce’s widow and the executor of Smith’s estate continued the litigation. In 2011, the U.S. Supreme Court again issued a ruling in the case. This time the Court ruled that, although the bankruptcy court had jurisdiction to hear the case, it had no authority under the U.S. Constitution to enter judgment in favor of Smith.

The heirs are still fighting over the Marshall fortune. Last month, the Texas probate judge who has been hearing the case for nearly two decades recused himself, stating he was tired of the case and frustrated with the litigants’ inability to agree on anything.

It probably goes without saying that this is the kind of situation most families would wish to avoid. Although it’s impossible to say whether this particular fight could have been prevented, an individual with a substantial estate who has concerns about asset protection might consider a revocable trust as his or her primary estate planning mechanism.

Source: Forbes, “Judge In Decades Old Anna Nicole Smith Case Announces He’s Had Enough,” Kelly Phillips Erb, Jan. 30, 2017

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