Top Three Inheritance Disputes

Top Three Inheritance Disputes

by Michelle Kaminsky, Esq., December 2009

One of them died without a will, one had people contesting what he wrote, and the other just had a lot of strange stuff happening surrounding her estate, but all of the following rich and famous personalities have one thing in common—they are parts of the top inheritance disputes in United States history—and (at least) two of them are still ongoing:

Howard Hughes

Although this billionaire aviator, engineer, industrialist, film director and producer, and playboy died in 1976, his estate is still the subject of lawsuits, in particular from Melvin Dummar, a Utah gas station owner who insists that Hughes left him a sizable inheritance after Dummar allegedly rescued Hughes from the side of a Nevada highway.

Hughes lived a life truly fit for a movie ("The Aviator" starring Leonardo DiCaprio) having inherited his father's multi-million dollar fortune when he was still a teenager, and then flitting through Hollywood and national politics (he's often mentioned in Watergate Scandal discussions) while founding one of the nations' foremost medical research centers, the Howard Hughes Medical Institute in Maryland. His forays in the aviation industry are also well-documented from his Howard Aircraft to his ownership of TWA.

He is also famous, though, for his creative attempts at tax evasion, obsessive-compulsive disorder, mood swings, drug addictions, and reclusive lifestyle—throughout much of his life, tabloids had him rumored to be terminally and/or mentally ill, or dead. His actual death was just as mysterious as his years of seclusion in that his body was so debilitated and, some say, neglected that the FBI used his fingerprints to positively identify him.

Despite being worth an approximate $2.5 billion, no will was found upon his death, and his estate was eventually distributed to 22 cousins in 1983.

But then, since nothing about Howard Hughes could ever be ordinary, enter Dummar who claims (for the third time) that Hughes himself showed up to deliver a handwritten will, leaving him approximately $156 million. This "Mormon Will" (so named because Dummar stored it at the headquarters of The Church of Jesus Christ and Latter Day Saints) was specifically found to be a forgery in Nevada in 1978. In January 2007, a similar suit in Utah was dismissed, and now Dummar has filed again in Nevada for another try—thirty-one years after Hughes' death.

J. Howard Marshall II

When Anna Nicole Smith died earlier this year, interest in the distribution of the estate of oil magnate J. Howard Marshall II, estimated to be worth as much as $1.6 billion, suddenly spiked again. Why? Because this one is still in progress, sitting in the 9th Circuit Court of Appeals via no less than the United States Supreme Court—and how it ends may have a direct impact on Anna Nicole Smith's young daughter.

J. Howard Marshall II was 89 years old when he married 26-year-old Anna Nicole Smith in 1994; he died 14 months later. Smith (legal name Vickie Lynn Marshall) claimed that despite a will and trust in favor of his son E. Pierce Marshall, the elder Marshall actually intended to give her half his fortune in addition to the $8 million in gifts and property she received while he was alive. Marshall's other son, J. Howard III, also cut from any inheritance, joined Smith in seeking to invalidate the will and trust.

After a five and a half month trial, though, a Houston probate court jury didn't believe Smith's claims and unanimously found in favor of Pierce, specifically upholding Marshall's estate plan. Smith then turned to a California bankruptcy court, which, after 3 days, awarded her nearly half a billion dollars for "tortuous interference with a gift" by Pierce.

On appeal, the federal district court in California vacated the award, heard the case de novo (from the beginning), and reduced the award to $88 million. Then the 9th Circuit Court of Appeals reversed the district court, finding that neither the bankruptcy court nor the district court had jurisdiction, invoking the "probate exception," which generally finds state courts more capable of handling probate matters.

Then the United States Supreme Court stepped in and ruled that the 9th Circuit's interpretation of the "probate exception" was overly broad, and remanded the case to them to look at it again. So now we wait to see what the 9th Circuit will do this time around, and J. Howard Marshall II's estate remains in limbo twelve years after his death—despite his having a valid will.

Doris Duke

Doris Duke was the only child of James Buchanan (Buck) Duke, tobacco magnate and founder of the Duke Endowment, which prompted Trinity College in Durham, North Carolina to be renamed Duke University in 1924. Upon Buck's death in 1925, Doris inherited a large chunk of his estate, about $100 million ($1 billion in today's money) when she was just 12 years old.

She lived a charmed life to be sure and was active in philanthropic pursuits, most notably the Newport Restoration Foundation and Doris Duke Charitable Foundation. She acquired many homes and properties, including her "Shangri La" mansion just outside of Honolulu, Hawai'i, which is now owned by the Doris Duke Foundation for Islamic Art and is open for tours.

Duke is also known, though for being quite eccentric. At the age of 75, she adopted 35-year-old Hare Krishna follower Chandi Heffner, who then became eligible for trusts set up by Duke's father for her children. Duke maintained that Heffner was the reincarnation of her only biological child Arden, who died soon after birth in 1940. Duke and Heffner later had a falling out and Duke negated the adoption, but trustees still agreed to pay Heffner $65 million.

As she got older and her health more fragile, Duke became increasingly reclusive. In 1993, Duke died at home with only her butler, Bernard Lafferty, by her side; although some suspected foul play, no autopsy was performed and Duke's body was cremated within 24 hours, her ashes destined for the Pacific Ocean. In 1996, the Los Angeles' District Attorney's Office concluded there was no evidence of foul play.

The strangest aspect of Duke's life, though, just may be the controversy surrounding her will, in which she left most of her $1.2 billion estate to the Doris Duke Charitable Foundation and named Lafferty as sole executor of her estate. Lafferty selected U.S. Trust as corporate co-executor, but within a few years, both were removed from control because, the court found, Lafferty was squandering money on his "profligate" lifestyle and U.S. Trust wasn't doing anything to stop him.

Lafferty died in November 1996, seemingly ending the possibility for any further drama regarding the Doris Duke estate, but if there's one thing we can learn from recounting the stories of the estates of the rich and famous—one can never really know for sure.