Lessons Learned: The Anna Nicole Smith Battle Still Rages On

After nineteen years of battling from probate court all of the way to the United States Supreme Court twice a recent court ruling seems to have ended the battle between the estates of Anna Nicole Smith and Pierce Marshall, for now. Called “The Grand-Daddy of all Estate Battles” these two estates have been battling over the $1.6 billion fortune left by Ms. Smith’s husband and Mr. Marshall’s father, J. Howard Marshall, for almost two decades.

History of the Feud

Federal court proceedings began regarding this estate in 1996 when Anna Nicole Smith filed for bankruptcy in California. The bankruptcy led to a $475 million judgment against Pierce Marshall, but only temporarily. The judgment was reduced to $88 million on appeal, and then appealed again, making to the United States Supreme Court on two separate occasions. After the second trip to the Supreme Court, where the judges rejected Anna Nicole Smith’s claims, it had appeared then, too, that the battle was over.

However, in May 2013 a federal district court in California issued a new ruling in favor of Anna Nicole Smith’s estate and against Pierce Marshall’s estate. During all of the legal battles both Anna Nicole Smith and Pierce Marshall had died, leaving the estate planning attorneys to continue to do battle with one another in probate court.

This new ruling allowed Ms. Smith’s attorneys to collect significant sanctions, yet to be determined, against Mr. Marshall’s estate because of unethical conduct that included destroying and hiding evidence, falsifying documents, and causing undue delays. The ruling also applied to the elder Mr. Marshall’s estate planning attorney, as well, who routinely referred to Ms. Smith as “Miss Cleavage.”

This latest ruling was then placed on hold because the California judge was unsure of how to proceed. On one hand, he had an obligation to uphold the Texas court’s ruling in Pierce Marshall’s favor that stated that his father’s final estate plan was valid. On the other hand, the same team had also conducted itself unethically during the proceedings.

The Current Ruling

The California judge waited over a year before making a decision on the ruling handed down in May 2013. Recently, the judge decided to reverse his prior ruling and dismiss the sanctions against Pierce Marshall and J. Howard Marshall’s estates. The judge came to this decision based on the Texas probate court ruling in addition to the impossibility of determining what amount of sanctions would be appropriate given that the actions took place so many years ago.

However, while that ruling may have ended the court battles in California, Ms. Smith’s attorneys still have the right to appeal the judgment in Texas. An appeal was filed in 2002 after the 2001 ruling, but it was put on hold while the California issues were fought. If Ms. Smith’s estate wins its appeal in Texas then the California ruling could be overturned, and the battle continues to rage on.

Lessons Learned from Anna Nicole Smith’s Estate

Ms. Smith’s estate provides a valuable lesson for everyone creating an estate plan about the danger of family feuds. While two-decade long court battles are not the norm, even modest estates can face battles that last a year or more in probate court. While nothing can be done to completely eliminate the possibility of family fighting there are steps that an estate planner can take to minimize the chances of it occurring.

Try to avoid probate court as much as possible when planning an estate, and consider using trusts and other tools for your assets. In addition, have a discussion with your heirs and explain why you are making your estate planning choices. This knowledge is usually enough to quiet any complaints that may have happened further down the road.

Contact Information