EoD Editor’s Note:  In the past weeks, EstateofDenial.com has featured posts regarding how techniques and legal maneuvers seen in high profile cases (Astor, Helmsley) can also be used in looting attempts of more modest estates.  The legal cases surrounding the estate of J. Howard Marshall II exemplify the ultimate in Involuntary Redistribution of Assets (IRA) acts.  With that, we held this analysis until National Estate Planning Awareness Week (October 20 - 26) to help educate the public regarding how wannabe heirs, unscrupulous attorneys and even overreaching courts can work to usurp inheritance rights within even the most properly prepared of estate plans.

We’ve always reported on the speculative nature of Involuntary Redistribution of Assets (IRA) efforts.   Nothing ventured, nothing gained?   Lawyers or people associated with an estate see an opportunity for a claim and go for it.  Under the right circumstances, finding a legal accomplice isn’t too difficult.  The veracity of the claim is irrelevant.  Just making the claim could be cash generating.

Anna Nicole Smith was joined in some of her litigation efforts by J. Howard Marshall III, the older, disinherited son of J. Howard Marshall II.  Marshall III had been disinherited by his father due to a 1980 dispute over control of Koch Industries.  The story routinely told was that Marshall III sided with a faction of the Koch family trying to take control from the faction in power.  The elder Marshall vehemently opposed this takeover effort and bought his son’s stock to ensure the interest wasn’t used against those Marshall II supported.  As a provision of buying the stock, Marshall III claims that his father verbally agreed that Marshall III and Pierce Marshall would share equally in their father’s estate.  During the Houston probate trial, even Eleanor Stevens, the then 96-year-old mother of J. Howard III and Pierce Marshall, testified via a videotaped deposition how she had tried to patch things up between her son and former husband, but that J. Howard II would never agree to leave his older son an inheritance.

Descriptions of Smith’s courtroom conduct ranged from exaggerated injuries to emotional outbursts to outrageous testimony and show that Judge Mike Wood had his hands full.  All accounts indicate that Smith and her attorneys consistently pushed limits regarding their basis for arguments, use of “expert” witnesses, scheduling ploys and other daily behavior in the court yet Judge Wood kept the trial moving forward with a goal of settling the dispute.  Smith claimed that Pierce Marshall was trying to kill her.  How original.  In the time that we have been investigating these cases, it’s amazing the number of would-be killers that we have met.  Accusing one’s IRA target of murderous intentions appears to be a routine tactic.  Smith also alleged that Pierce Marshall wanted his father dead as evidenced a “Do Not Resuscitate” order.  If that’s the standard for alleging intent to harm, much of our population having parents over the age of 60 are would-be killers.

Smith was so dramatic with her claims that Judge Wood at one point threatened to find her in contempt of court if she continued her baseless accusations. When he referred  the matter to the district attorney for investigation into whether  Smith committed perjury, her attorneys seized the opportunity to attempt having Wood recused.  This recusal effort created a new round of gamesmanship with Wood ultimately continuing as the trial judge.  Marshall III’s lawyers even attempted to derail the trial by engaging a member of the Texas House of Representatives in order to seek a legislative continuance. For the average person, it’s important to understand that truthfulness can be absent in court testimony.  Even if witnesses are thought to be lying, rarely are they prosecuted.  Asset looters, people who are morally vacant to begin with, know and will use this.   Also, IRA practitioners will watch for every opportunity to distract and delay proceedings.  It works to help wear down the target’s resolve as well as, in many cases, hopefully deplete their financial resources.

The Houston jury ultimately found unanimously that J. Howard Marshall II promised neither Anna Nicole Smith nor J. Howard Marshall III any portion of his estate.

These verdicts exonerated Pierce Marshall.  While this ruling set off new legal actions that continue today, the decision remains important as the Houston trial was the most lengthy, detailed investigation of the case.

Having also been heard in front of a jury, this outcome reflects a view emanating from a group of diverse people who, when presented all the facts and assorted testimony, came to the same unified conclusion.  With so much money at stake, though, Smith and her legal team just shifted their efforts to the California courts where their speculative claims had been better received.

Another outcome of the Houston jury verdict imposed $35.3 million in damages on J. Howard Marshall III for bringing what the jury viewed as a baseless lawsuit.  The amount was later reduced to $10 million.  Interestingly, Marshall III conveniently filed for Chapter 11 protections in Judge Bufford’s Bankruptcy Court in Los Angeles - the very same court that presided over Smith’s bankruptcy.  Upon the verdict rendering the initial $35.3 million damage award, Marshall III’s attorney was quoted as saying that his client would be “wiped out” if the award was upheld.  He expressed no concern or regret about the financial damage he and his client had wrought on the rest of the Marshall family.  We are close to other IRA cases that have neither the prolonged history nor dollar value associated with the Marshall cases, but have seen the devastation caused in the lives of people targeted by these actions.  So to J. Howard Marshall III, the man who feared financial ruination due to his participation in a speculative estate looting effort, too damn bad.  EstateofDenial.com advocates harsh penalties toward people who mount baseless efforts to acquire assets of the dead or disabled.

Perhaps if word gets out that grave robbing, asset looting or property poaching attempts can have seriously negative consequences, IRA actions will become less appealing.

This piece discusses only a small portion of the Marshall cases.  The legal complexities and sheer volume of activity make it an incredible study.  Our points addressed are issues or actions which surface or have relevance to estate disputes (or potential disputes) of average Americans.  Sadly, Pierce Marshall died in June 2006.  The legal battle was continuing as was his commitment to honoring his father’s final wishes.  And despite Anna Nicole Smith’s 2007 death, judicial decisions made after the Houston trial continue to be under review.

Did Anna Nicole Smith really believe that Pierce Marshall committed tortious interference and denied receipt of her alleged gift?  We certainly don’t know and to a degree, it doesn’t matter.  Speculation can be defined as “engagement in business transactions involving considerable risk but offering the chance of large gains, especially trading in commodities, stocks, etc., in the hope of profit from changes in the market price.”

Sound familiar?  We’re not lawyers, but a common sense, practical view of this case says that Smith, Marshall III and their attorneys knew that making this claim against Pierce could be lucrative.  When these cases get going, reality becomes unimportant and the truth takes a back seat to the legal gamesmanship.  In our opinion, these 15 years of litigation have been about nothing more than attempting to use an unsubstantiated claim and the legal system to extort assets received via a legitimate inheritance.  It’s that simple, it’s that ugly and it happens every day.

Involuntary Redistribution of Assets practitioners target estates of all sizes and many people don’t have the financial means or general wherewithal to even fight such an action.  As this point is never lost on prospective asset looters, people must become vigilant.  Those who initiate or participate in IRA actions are heinous people compromised both in their ethics and morals.  Their behavior is in no way excusable, but it should be studied so as to understand with what you are dealing - that their creation of an uneven or chaotic playing field is far more important than any legitimate case merits.  Pierce Marshall learned this, as have many other IRA targets.

Despite significant resources, the Marshall family has been unsuccessful in ending their legal and financial assault. This gives pause for concern as new IRA cases seem to surface almost daily.  Many people’s economic welfare has already been harmed due to current economic turmoil and ever-increasing taxation.  Now, estate assets once thought to be yours or your prospective heirs may not stay that way due to speculative efforts of disgruntled family members or others perceiving some “entitlement.”  Widespread exposure of this problem is the critical.  No inoculation for Involuntary Redistribution of Assets exists, but as we always say, forewarned is forearmed.

See Marshall v. Marshall:  fantasy claims spawn nightmare litigation, part 1