Anna Nicole Smith’s will
Anna Nicole Smith’s will is recently available online at various venues, such as CNN. The will, in interaction with the facts, raises a number of questions. It’s practically a real-life law exam. This post will discuss a few of the many issues raised by the will.
This discussion is limited in a number of important ways. For example, there are messy jurisdictional questions; there may be questions about the existence of other potential heirs (an interesting possibility, raised in this news article); it seems not outside the realm of possibility that a later will or codicil will surface. There are also a whole array of questions falling under the broad umbrella of undue influence or related impropriety. Conspiracy theorists are already suggesting that the lawyer, Howard Stern, orchestrated a complicated web of murder. Even less exotic and more mundane possibilities, like plain vanilla undue influence, could still drastically affect the distribution. Finally, there are big question marks relating to the value of the estate. The $80 million question is the litigation over the estate of Ms. Smith’s late husband. The ultimate value of her estate could vary greatly depending on how those issues are ultimately resolved.
But even setting aside those questions, the will still leaves a number of interesting issues. Questions that come out of the will itself include whether Anna Nicole Smith’s daughter will be treated as a pretermitted child, and the question of how to treat the lapsed bequest to Anna Nicole Smith’s son, Daniel. We can frame the query in a way that highlights these sub-issues. In fact, it makes quite a nice law-exam-style question.
“Anna executes a will in California in 2001. She leaves her entire estate to her son Daniel, to be held under various trust provisions. She also explicitly disinherits any other relatives, as well as any future spouses or children she might have. Her will contains no residuary clause. In 2006, Daniel dies suddenly, leaving no issue. Later in 2006, Anna’s daughter Dannielynn is born. In 2007, Anna dies. How is her estate distributed under California law?”
Is Dannielynn a pretermitted child?
The answer here is “Yes, but.”
Yes, she is a pretermitted child. That is, she is a child born after the execution of the instrument. Such children are often able to inherit under the California statute, taking an intestate share:
21620. Except as provided in Section 21621, if a decedent fails to provide in a testamentary instrument for a child of decedent born or adopted after the execution of all of the decedent’s testamentary instruments, the omitted child shall receive a share in the decedent’s estate equal in value to that which the child would have received if the decedent had died without having executed any testamentary instrument.
However, exceptions under the California statute include explicit disinheritance:
21621. A child shall not receive a share of the estate under Section 21620 if any of the following is established:
(a) The decedent’s failure to provide for the child in the decedent’s testamentary instruments was intentional and that intention appears from the testamentary instruments.
Given that statutory exception, and the explicit disinheritance on the face of the will, it is clear. Dannielynn does not inherit through the pretermitted child statute.
Does this mean that she is unable to inherit? Not exactly. She cannot take through the will, but she may still be able to claim an intestate share of portions of the estate that pass outside the will.
How is the lapsed gift to Daniel treated?
First of all, as a general matter, the deceased do not inherit.
21109. (a) A transferee who fails to survive the transferor of an at-death transfer or until any future time required by the instrument does not take under the instrument. (b) If it cannot be determined by clear and convincing evidence that the transferee survived until a future time required by the instrument, it is deemed that the transferee did not survive until the required future time.
Okay, so what happens to a lapsed gift? Here, the statute diverges into two branches. If the deceased transferee left issue, then the issue take. If not, then the gift passes to any contingent takers; if there are no contingent takers, it passes to the residuary taker; if there is no residuary taker, it falls into the estate.
21110. (a) Subject to subdivision (b), if a transferee is dead when the instrument is executed, or fails or is treated as failing to survive the transferor or until a future time required by the instrument, the issue of the deceased transferee take in the transferee’s place in the manner provided in Section 240. . . . (b) The issue of a deceased transferee do not take in the transferee’s place if the instrument expresses a contrary intention or a substitute disposition. . . .
21111. Except as provided in subdivision (b) and subject to Section 21110, if a transfer fails for any reason, the property is transferred as follows:
(1) If the transferring instrument provides for an alternative disposition in the event the transfer fails, the property is transferred according to the terms of the instrument.
(2) If the transferring instrument does not provide for an alternative disposition but does provide for the transfer of a residue, the property becomes a part of the residue transferred under the instrument.
(3) If the transferring instrument does not provide for an alternative disposition and does not provide for the transfer of a residue, or if the transfer is itself a residuary gift, the property is transferred to the decedent’s estate. . . .
The lapsed gift would go first to Daniel’s issue, but he has none. Next, it would go to the contingent taker, but there is none. Next, it would go to the residuary taker, but again, there is none.
So the most likely answer is, it falls into the estate. Nobody takes under the will, and the entire estate passes in intestacy. From there, we turn to the intestate statute (6401 and 6402). With no surviving spouse, the entire estate passes to the deceased’s children. Which is, in this case, Dannielynn. (And any other children who may be discovered.) So while she doesn’t take under the will (because of the exclusion clause), she stands to take in intestacy. Also, because the property passes in intestacy rather than under the will, the various trust provisions in the will (intended to keep Daniel from receiving all of the property at once) will be ineffective.