Infamous Will Disputes

By Harry L. Munsinger, J.D., Ph.D.

Even though famous people generally leave substantial estates when they die, family members often feel slighted by the will or trust and decide to fight for a larger share of the family assets. Even children who receive generous trust funds prior to their parents’ deaths sometimes feel cheated by their parents’ wills and sue the family for additional funds. Will disputes support the old adage: “There is never enough money to make people happy.” And fights over an inheritance often bring out the worst in people.

Estate of J. Seward Johnson.

J. Seward Johnson, Sr. was a son of one of the founders of Johnson & Johnson. The battle over his estate was finally settled in 1986, after years of expensive litigation. The single issue was whether Johnson was mentally competent when he signed a will on April 14, 1983. In that will, Johnson left the bulk of his considerable estate to his much younger second wife Barbara Johnson, his former maid. Under the terms of the will, Barbara Johnson would receive approximately $8 million as executor of the Johnson estate, plus an annual fee of $900,000 for life. Johnson’s children alleged that he was disoriented and not competent to draft his last will and testament when he signed it in 1983.

At trial, the children’s attorneys presented thirty-seven witnesses, including nurses and employees, who testified that the elderly Johnson did not understand what he was doing when he signed his last will. In rebuttal, attorneys for Mrs. Johnson presented thirty-eight witnesses, who claimed he was alert and mentally competent until he died at age 87 from prostate cancer. Before the judge announced his verdict, he sent the parties out to try to settle their dispute.

In the settlement they negotiated, Mrs. Johnson received over $300 million of the considerable estate derived from the Johnson & Johnson pharmaceutical fortune. Mr. Johnson’s six children received $42 million to divide among themselves. An oceanographic institute founded by Mr. Johnson was awarded $20 million, and Mrs. Johnson agreed to pay $10 million in attorney’s fees to the children. Johnson’s son, J. Seward Johnson, Jr., was awarded approximately $7 million in lieu of an executor’s fee. The IRS received approximately $80 million in estate taxes. The Johnson children were already wealthy, having received around $450 million in trusts and other gifts over the years, but they still sued Barbara Johnson, claiming she had taken advantage of her husband’s incompetence.

Estate of H. L. Hunt.

H. L. Hunt’s son and grandson settled their longrunning dispute over the eldest Hunt’s estate—with both sides claiming victory, although the terms of the settlement are confidential. The dispute began shortly after Margaret Hunt Hill, the mother of Al Hunt, Jr., died in 2007. Al Hunt, Jr. had gifted his share of Margaret’s trust to his three children, but when Al Hunt, III asked for an accounting of the trust, his father got so angry that he disinherited his son. Al Hunt, III sued his father, sisters, aunts, and a cousin, accusing them of stealing money from the estate and conspiring to evade taxes. After numerous lawsuits, a federal judge finally ordered both sides to try to settle their dispute, which they did. After settlement, all litigation was dismissed. Although both sides claimed victory, the attorneys involved said the settlement was fair and neither side won—which usually means they split the difference in their demands.

Estate of Brooke Astor.

Brooke Astor was a socialite and philanthropist, whose third husband was a descendent of America’s first millionaire, John Jacob Astor. A long-running feud over Brooke Astor’s estate ended in 2012 with a settlement. The agreement created the Brooke Astor Fund for New York City Education and gave the fund $30 million. Additional millions were earmarked to maintain Central Park, city playgrounds, Prospect Park, and several cultural institutions in New York City. The most significant item in the settlement was the smaller inheritance of Ms. Astor’s son, Anthony D. Marshall. His portion of the estate was decreased from from $31 million to $14.5 million because he had been convicted of stealing money from his mother, for which Mr. Marshall and the attorney who planned Ms. Astor’s estate were sentenced to three years in prison. They both remain free on bail pending appeal of the criminal convictions. The settlement is binding and will not change, no matter what happens in the criminal appeal.

Estate of Fred Koch.

Fred Koch was a college boxer and fierce competitor who made a fortune in oil refining and founded Koch Industries. He raised his sons Frederick, Charles, David, and Bill to be competitive. When the Koch brothers became adults, their father bequeathed his business to them. Charles and David ran the business and grew it into the second largest privately owned company in America. While Charles and David were managing the family business, Bill became a collector of expensive homes and fine wines, a playboy, and a skilled yachtsman who won the America’s Cup in 1991.

Frederick and Bill enjoyed their father’s money, while Charles and David worked hard managing Koch Industries, earning billions over the years, while Bill earned much less. Bill was jealous of Charles and David’s success, and he became so emotionally volatile that his parents took him to see a psychologist. The psychologist told Bill’s parents that the cause of his volatile emotions was competition with Charles and estrangement from the family. David and Charles were athletic and confident, while Bill felt isolated, left out, and angry.

Bill was asked to join Koch Industries in 1974, but he always felt like an outsider around Charles and David. On Christmas Day 1979, Bill asked his mother about the disposition of her estate. Charles told Bill to leave his mother out of the family arguments, but Bill then attacked Charles, saying he was running Koch Industries like a dictator. Later, Bill alleged that Koch Industries has a reputation for “screwing over its partners.” Bill was also concerned that the company was running into trouble with government regulators and resented the money Charles diverted to libertarian political causes. Most important, Bill was short of cash—all his assets were tied up in the family business, and there was no public market for his stock. If Bill had wanted to sell his shares, it would have had to have been at a steep discount.

Bill wanted to take the company public so there would be a ready market for his shares, but Charles opposed the whole idea because he did not want the government regulating his business. In 1980, Bill declared war on Charles and David by distributing a private letter to the shareholders of Koch Industries, asking to take the company public and complaining about Charles’ handling of the business. The board meeting was tense with the airing of this dispute. Charles considered firing Bill, but instead he asked Bill if he was interested in selling his stock. Bill said, “No.”

After Thanksgiving in 1980, Bill and Frederick called a board meeting to discuss a change of management at Koch Industries, and they solicited other shareholders to oust Charles as CEO. David called Frederick and asked him if he planned to fire Charles, and he said, “Yes.” David then called Bill and asked if they intended to fire Charles, and Bill denied it. Since David already knew their plans from talking with Frederick, he called Bill a liar and said he was no longer David’s brother. The outcome of the vote to oust Charles as CEO hinged on four percent of Koch Industries stock held by one of J. Howard Marshall II’s sons. J. Howard felt loyal to Charles and David because of his relationship with their father Fred, so he bought the stock from his son to protect Charles.

After Bill’s revolt fell apart, the Koch board called a special meeting to debate Bill’s fate at Koch Industries. Following lengthy discussion, the board voted to oust Bill from the company by a significant majority, so David was able to abstain. Charles wanted loyalty from the members of his company and decided he needed a divorce from his brother Bill. Charles engaged Morgan Stanley and Lehman Brothers to value the company so that he could buy out Bill and any other shareholder who wanted to sell. The bankers estimated Koch Industries was worth approximately $160 per share. Bill said that was way too low. He hired Goldman Sachs and Bain & Company to produce another valuation of the company and filed litigation against Koch Industries, alleging mismanagement of the business. Charles and David filed a countersuit, claiming defamation because of an unflattering story placed in Fortune magazine by Bill. Ultimately. Charles raised the offer for Koch Industries shares to $200, and Bill accepted. The buyout gave Bill over $470 million, but he still felt cheated.

Two years later, Bill and Frederick filedanother suit against Koch Industries, claiming Charles had hidden assets during the settlement negotiations. Later, Bill and Frederick named their mother as another defendant in the litigation, possibly triggering a stroke. Bill’s lawyer subpoenaed her for a deposition, anyway. The dispute was about a clause their mother had put in her will, demanding that Bill dismiss his suit against Charles and David or be disinherited. After his mother died, Bill challenged her will, alleging that Charles and David had unduly influenced her to place the clause in the will. However, Bill lost his suit against his mother’s will and was faced with the choice of either dismissing his suit against Charles and David or losing his considerable inheritance from his mother.

Will disputes support the old adage: “There is never enough money to make people happy.” And fights over an inheritance often bring out the worst in people.

Bill hired private detectives to spy on Charles and David and dig up dirt on them that he could use in court. To protect themselves, Charles and David hired other private detectives to spy on Bill. During the court fight over Bill’s suit against Koch Industries, Bill’s sordid personal life came out in open court. One salacious tale involved a suit to evict a former Ford model from his apartment in Boston. It turned out that Bill was having sexual relations with two other women while he was having an affair with the Ford model. A few months after Bill won an eviction of the Ford model from his Boston apartment, another love interest announced she was pregnant with Bill’s child and moved into his Palm Beach mansion.

Bill’s suit against Koch Industries was scheduled for trial in April 1998. At trial, Charles’ legal team described the lawsuit as a case of sibling rivalry gone wild, and a continuation of a family feud that should have been settled way back in 1983. On the first day of trial, Bill’s attorneys called David to the stand. When asked why he had abstained during the vote to oust Bill from Koch Industries, David said he still cared about his twin brother and did not want to sever family ties, so he had abstained. David said that Bill had done some terrible things to the family, and that he did not want him to act that way because he loved Bill. Frederick took the stand next and said he was not really involved in Koch Industries because he had charitable activities and was not interested in the oil business or the family businesses at all. His testimony was brief and of no consequence.

When Charles took the stand, he was modest and unassuming. When asked about his job, Charles testified that he worked for Koch Industries, rather than claiming he was the company CEO. Charles denied that his father had taught the boys that litigation was the way to settle disputes, testifying instead that his father had told him, “Never sue.” Although the trial was hard on all the brothers, it was especially difficult for Charles.

Bill was called to the stand during the defense case, and he suffered from a cold during most of his seven days of testimony. Bill described Charles as a dictator, but when Charles’ attorney took Bill on crossexamination, he destroyed Bill’s credibility by highlighting his efforts to get money from the family, even if it meant breaking up the company and destroying family ties. Bill testified that he was conflicted about the business—on the one hand, he was attached to the business, but on the other, he wanted the best price he could get for his shares. Bill admitted that greed had won.

The jury found that Charles was guilty of misrepresentation, but that it was not material, so he and David had won because there were no damages. Although Charles had concealed some information during the settlement, it was trivial. Charles and David were relieved, while Bill claimed the verdict was “a moral victory.” Bill and Frederick took their appeals all the way to the United States Supreme Court, which refused to hear the case.

Estate of Leona Helmsley.

When Leona Helmsley died in 2007, at the age of eighty-seven, few tears were shed. Her obituaries highlighted mistreatment of employees, disdain for “little people,” and her time in prison for tax fraud. She was labeled the “queen of mean” by the New York papers. Although Mrs. Helmsley created several generous charitable trusts in her will, the item that caught the public’s attention was a $12 million bequest for care of her dog. The animal was so pampered that its meals were prepared by a hotel chef and fed to the dog by maids.

The Helmsley estate, valued at over $5 billion, consisted of prime New York real estate. Leona was a successful New York real estate broker when she met Harry Helmsley, who fell in love with her and left his wife. The couple lived a royal lifestyle, but even with all her money, Mrs. Helmsley was miserly with contractors and refused to pay taxes to New York City. Her contractor sued for payment of renovations to her Connecticut home, and even after she was forced to pay, she insisted that the invoices be charged to Helmsley Hotels so that she could get a tax deduction. The contractor was so angry that he sent the false invoices to a reporter, who exposed how Mrs. Helmsley did business. The Manhattan District Attorney promptly indicted her for tax evasion. At trial, one of her maids testified that Mrs. Helmsley had said, “Only little people pay taxes.” Mrs. Helmsley was sentenced to four years in prison, but she served only eighteen months before being released.

She was survived by four grandchildren and a brother. Approximately 99% of her fortune went to the Leona M. and Harry B. Helmsley Charitable Trust. Although the trust would do good work in New York after Mrs. Helmsley’s death, the $12 million bequest to her dog captured most of the headlines in New York papers. Her grandson Craig Panzirer and her granddaughter Meegan Panzirer were given nothing, while grandchildren David and Walter each received $5 million. Her brother Alvin received $5 million in cash and a charitable trust that paid five percent annually to him. Mrs. Helmsley established a $3 million trust to maintain the Helmsley Mausoleum.

Because Mrs. Hemsley’s will disinherited two grandchildren, left $12 million to care for a dog, and did not identify the purpose of the giant charitable trust she established, litigation was almost certain. However, rather than spend years fighting in court, the parties wisely negotiated a settlement of their dispute. The agreement was approved by Surrogate Judge Renee Roth on April 20, 2008. The settlement gave the two disinherited grandchildren $6 million to be divided between them, while other bequests were reduced a proportionate amount. The court ordered the $12 million bequest to care for Mrs. Helmsley’s dog reduced to $2 million and gave the balance of the $12 million to the charitable trust, which continues to benefit New York City.

Estate of J. Howard Marshall II.

J. Howard Marshall II made a fortune investing in Koch Industries and married a much younger woman, Anna Nicole Smith, a/k/a Vicki Lynn Marshall, late in life. The combination of vast wealth, a younger wife, and step-children created twenty years of litigation, two appeals to the United States Supreme Court, and millions of dollars in attorney’s fees as the family fought over J. Howard’s estate. The dispute even created a Constitutional precedent when Chief Justice John Roberts wrote, in Stern v. Marshall, 7 that a federal statute granting bankruptcy courts the authority to decide remotely connected claims based on state law was unconstitutional. After years of litigation, a Texas appellate court wrote the final chapter in this salacious estate fight— ruling that Anna Nicole Smith was not a beneficiary of J. Howard Marshall II’s will, thereby confirming a 2001 jury finding, reached after a long trial involving hundreds of documents and hours of testimony.

Estate of B.B. King.

Fifteen women claimed that legendary blues guitarist B.B. King had fathered their children, and he never denied any of the allegations. When he died in 2015, King left a legal mess, pitting his many families against each other and his estate administrator in a fight over his estate. The dispute was about two wills and trusts signed in 2007 and 2014. The earlier will and trust granted generous allowances to several of King’s children, while the 2014 will and trust did not include any grants to the children and appointed LaVerne Toney as administrator of King’s estate.

King loved his families and paid for their support while he lived, but the support stopped when he died. The children claimed they received nothing after their father’s death, and they wanted to get their fair share. They also claimed that King’s estate administrator, Toney, had poisoned him, although an investigation found no evidence to support the allegation of poisoning. Toney sued the children for defamation. The dispute split the family, with some trying to bring peace and others filing suits for their “fair” share of the King estate.

Several of King’s children sued Toney, alleging that she had been taking money from King’s estate for her own benefit. The suit also claimed she had neglected King’s medical care during his declining years. These claims resulted in an investigation by the Las Vegas Police Department, which found no evidence supporting any of the children’s allegations. Toney’s attorneys found a birth certificate, which showed that Karen Williams—the leader of the family group that filed suit against Toney for defrauding King’s estate—was not even biologically related to King. King’s personal physician and dentist also filed affidavits with the court, stating that he was always well cared for by Toney. Toney admitted that there had been a theft of property from King’s estate, but testified that King had told her not to file a police report because he thought members of his own family might be responsible for the theft.

Aside from the allegations of murder and theft, which seem to have been resolved, the King family also asked for an accounting of the estate. The King children split into two factions fighting with Toney over the estate. Toney said she was trying to carry out the terms of King’s last wishes, but the children disagreed. They claimed the 2014 trust, which is the one Toney was following, was flawed because it was drafted when King was blind and suffering from cognitive decline. The children wanted the earlier trust upheld because they claimed their father was competent at the time it was drafted. The probate court reviewed the 2007 and 2014 wills and trusts and confirmed LaVerne Toney, his longtime business manager, as administrator of B.B. King’s estate.

The complicated family dynamics all but ensured conflict over King’s estate. As the saga gained press coverage, more women came forward claiming King was the father of their children. Just before he died, King said to ignore any of these claims because he “wasn’t taking no more kids on.” Toney is using B.B. King’s estate to support and expand King’s musical legacy.

Sumner Redstone Estate.

Sumner Redstone was a billionaire who grew his family’s drive-in theatre business into a media empire, including Viacom and CBS, before dying at the age of 97. However, the suits over his assets began even before he died.

In 2015, Redstone’s former girlfriend Manuela Herzer was ejected from his mansion and written out of Redstone’s will. In an attempt to restore her position as Redstone’s primary caretaker, Herzer filed suit, exposing to the world his failing health and salacious details about his dating habits and emotional history. Shari Redstone, Sumner’s estranged daughter, took over management of her father’s personal and business affairs, after it was revealed that Redstone was incompetent. Herzer claimed that Shari was improperly taking control of the family businesses and demanded that Redstone be examined by independent physicians. The physicians’ findings caused Sumner Redstone to be removed from managing his businesses. The details of Redstone’s poor health also triggered shareholder suits and board room fights. In 2016, Shari Redstone gained control of Viacom, and CBS promptly sued the Redstone family, attempting to take voting control of Viacom. That suit was dismissed when the CEO of CBS was accused of sexual harassment and lost his job.

In 2016, Shari Redstone sued two of her father’s former girlfriends, claiming elder abuse. The family alleged his former girlfriends had conspired to isolate Sumner from his family and steal money from his companies. The suit stated that Redstone had lavished gifts of more than $150 million on the former girlfriends. In the end, after years of wrangling, the former girlfriends ended up with next to nothing.

After more than two years of litigation and seven separate suits, Herzer and the Redstone family finally settled their dispute over his estate. In the agreement, Herzer agreed to pay the Redstone family $3.25 million reimbursement for gifts from Redstone. The settlement was reached shortly before trial, and it represented a significant loss for Herzer, who had rejected an offer of $30 million from the Redstone family two years earlier.

If there’s any lesson to be learned from these infamous will disputes, perhaps it is that greed rarely pays.

Harry Munsinger recently concluded a long practice that focused on Collaborative Divorces, Estate Planning, and Probate matters. Harry holds a Ph.D. in psychology from the University of Oregon and a J.D. from Duke University School of Law, where he was a member of the Duke Law Journal.

ENDNOTES

Frank J. Prial, Accord Reached on Johnson Will, NewYork Times (June 3,1986).

Settlement ends Dallas legal feud between H. L. Hunt heirs, The Dallas Morning News (May 6, 2010).

John Eligon, Settlement in Battle Over Astor Estate isReached, New York Times (March 28, 2012).

Daniel Schulman, Koch vs. Koch: The Brutal Battle That Tore Apart America’s Most Powerful Family, Mother Jones (May 20, 2014).

Ronald P. Colicchio, Lessons from The Leona Helmsley Estate, http://www.newjerseyprobatelitigation.com/ lessons-from-the-leona-helmsley-estate/ (June 9, 2015).

Daniel Fisher, Court Ruling Likely Ends Anna Nichole Smith Estate’s Fight for Marshall Family Millions, Forbes (July 14, 2015).

Stern vs. Marshall, 564 U.S. 462 (2011).

Scott Johnson, B.B. King’s Estate War: 15 Kids, 15 Moms and a “Totally Haywire” Fight, Hollywood Reporter (May 26, 2016).

Meg James, Sumner Redstone and Family Settle Legal Dispute with his Ex-companion Manuela Herzer, Los Angeles Times (January 8, 2019).