The estate of Anna Nicole Smith recently lost its claim in the U.S. Supreme Court. A narrowly divided court decided 5-4 that the bankruptcy court exceeded its jurisdiction by awarding Anna Nicole Smith $475 million. The Court determined that the bankruptcy court did not have the jurisdiction to try what amounted to a probate case.
In 1994, Anna Nicole Smith married oil billionaire J. Howard Marshall. At that time, Smith was 26 and Marshall was 89. Marshall died the next year and did not name Smith in his Will. Smith claimed that Marshall had promised her $300 million.
A protracted legal battle commenced between Smith and E. Peirce Marshall, J. Howard Marshall’s son. Smith was awarded $475 million from the Marshall estate by a bankruptcy court in California. That award was later reduced to $88 million by a different federal court. The matter was before the bankruptcy court due to Smith’s insolvency. However, the probate estate was under the jurisdiction of a Texas probate court.
The matter is now resolved, but only after the deaths of J. Howard Marshall, his son, E. Peirce Marshall, Anna Nicole Smith, and her son Daniel. The matter had been before courts in multiple courts in Texas, Louisiana, and California and had been appealed all the way to the U.S. Supreme Court—twice. After all of that, Smith’s heirs did not get the millions which they sought. Likely, this case will end up in Civil Procedure textbooks in the years to come. Here’s a link to the final opinion in the case: http://www.supremecourt.gov/opinions/10pdf/10-179.pdf
Is there a moral to this story? Perhaps, the moral is that there are few winners in a Will contest, except the lawyers.
Nobody wants the sort of emotional, financial, and legal mess which resulted after J. Howard Marshall’s death. But, how could it have been avoided? A valid prenuptial agreement between the parties would have spelled out their exact agreement. If that had been done, J. Howard Marshall’s son and Anna Nicole Smith probably would not have spent the last decade of each of their lives in a toxic court battle.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Rd Ste 240
San Diego, CA 92124