{"id":50427,"date":"2016-09-30T11:27:00","date_gmt":"2016-09-30T16:27:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/supreme\/legal-commentary\/beauty-and-the-billionaire.html"},"modified":"2016-09-30T11:27:00","modified_gmt":"2016-09-30T16:27:00","slug":"beauty-and-the-billionaire","status":"publish","type":"supreme","link":"https:\/\/supreme.findlaw.com\/legal-commentary\/beauty-and-the-billionaire.html","title":{"rendered":"Beauty And The Billionaire"},"content":{"rendered":"\n
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BEAUTY AND THE BILLIONAIRE: ANNA NICOLE SMITH AND THE RIGHTS OF THE SURVIVING SPOUSE \u0097 PART I <\/h1><\/td>\n <\/tr>\n

By JOANNA GROSSMAN<\/h2><\/a><\/td>\n <\/tr>\n

Tuesday, Nov. 21, 2000<\/td>\n\n <\/tr>\n <\/table>\n <\/i>

This is Part One of a two-part series in which Professor Grossman analyzes the Anna Nicole Smith case. \u0097 Ed.<\/p>\n\n

At age 26, Anna Nicole Smith married 89-year-old J. Howard Marshall, a multi-billionaire who had made his fortune in Texas oil. Although they courted for two years, Smith married Marshall immediately after he proposed \u0097 induced, she says, by his promise to leave her half of his estate. The wedding-on-a-whim took place before his lawyers (and children) could obtain her signature on a prenuptial agreement that would have limited her take of his estate to five million dollars in the event of his death. But, in the end, he left her nothing. <\/p>\n\n

This situation, in which a young trophy wife marries a man much older than she is and then fights his children over his estate, is a familiar story. The legal principles that govern what a young beauty can get by marrying an elderly billionaire are, however, much less well-known. What rights does Anna Nicole Smith, or any other surviving spouse, have?<\/p>\n\n<\/b>

Other Possible Worlds: Prenuptial Agreement, Intestacy, a Pre-Marriage Will <\/p>\n\n

Had Smith signed a prenuptial agreement, everything would probably have been much easier. It would not have been unusual; many second (and third, and fourth, and so on) marriages involve a prenuptial agreement, particularly when there is a significant disparity in wealth between two spouses and the richer spouse has children from a previous marriage. As long as a written agreement is signed voluntarily, after a full disclosure of each spouse’s assets, it operates to preclude either spouse from making a claim on the estate of the other. Although courts once viewed prenuptial agreements with suspicion, they have begun to enforce them more rigorously. <\/p>\n\n

Things might also have been simpler if Marshall had died without a will (intestate). The law generally protects the spouse of one who dies intestate by giving him or her a fixed share (the “intestate share”) of the decedent’s property. In some states, particularly if the decedent leaves no surviving children, the share is 100%. The law is based on the assumption that that is what the average spouse would have wanted, and the assumption is a good one: Empirical studies indicate that most people want their surviving spouses to receive a significant proportion, if not all, of their estates. <\/p>\n\n\n<\/b>

Anna Nicole Smith’s World: The Post-Marriage Will <\/p>\n\n

But what about Anna Nicole Smith’s situation? Certainly, she cannot take advantage of legal presumptions that Marshall would have wanted to give her money but forgot to make, or change, his will. Marshall executed a will and a codicil after<\/i> his marriage to her that specifically excluded her. <\/p>\n\n

Still, the law also provides some protection against intentional<\/i> disinheritance. That is simply because society has decided that lawful spouses should not be left penniless, even if that is what the decedent spouse really and truly wanted. How much protection the law gives depends on the state’s marital property system. In the U.S., there are forty-one “separate property” states and nine “community property” states\u0096including California and Texas, where Smith and Marshall got married. <\/p>\n

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Separate Property versus Community Property<\/p>\n\n

In a separate property regime, each spouse holds all property he acquires\u0096before and during marriage\u0096in his own name, and has the right to access, control, and dispose of only his own assets. In a divorce, most courts have the authority to engage in equitable distribution\u0096awarding some of the separate property of one spouse, or property classified as “marital property,” to the other based on various factors, including duration of the marriage, need, and non-economic contributions to the marriage.<\/p>\n\n

But when the marriage ends in death, the rules are different. The surviving spouse can either accept her bequest, or “elect against the will” and take a forced share (typically one-third) of the estate. In most cases, the spouse enjoys the ability to choose an “elective share” regardless of the length of the marriage, whether the parties loved or treated each other well, or whether she needs the support. Thus, the young bimbo who marries the aging billionaire for a mercifully short period of time (14 months for Anna Nicole Smith) is entitled to the same amount as the wife who lives through fifty years of marriage, twelve kids, and a life of ironing her husband’s shirts.<\/p>\n\n

In contrast, in a community property state like Texas, all property earned or acquired before marriage is separate property, as is property acquired by gift or inheritance during marriage. But property earned<\/i> during the marriage is generally community property, regardless of who earned it. That means each spouse gets a one-half interest in the property upon acquisition; the right to manage the property; and the right to keep, and eventually bequeath, his or her half of the community property (as well as all his separate property). <\/p>\n\n

When one spouse dies, the other spouse is protected not by an “elective share,” but by getting her half of the community property (even if it was all earned by her spouse) in addition to her own separate property. That means that, unlike in separate property states, a long-term spouse usually receives much better protection from disinheritance than a trophy wife does. <\/p>\n\n\n<\/b>

Will Contests: A Beauty’s Last Resort<\/p>\n\n

There is still one avenue left for an unhappy surviving spouse: a will challenge. Only three percent of wills are contested. Most of these involve significant wealth and “abnormal” estate plans \u0097 generally, one that does not pass wealth first to the surviving spouse and then to descendants. Examples include wills that disinherit a lawful spouse; leave money to a gay lover; disinherit children in favor of a new spouse or outsider (friend, home health aide, or charitable organization); or prefer one child over another. <\/p>\n\n

An “abnormal” will is vulnerable to challenge on the basis of mental incapacity (on the part of the testator), undue influence (by heirs of the testator), or fraud. The larger the estate, the greater the likelihood of a challenge \u0097 although anger and the desire for status and power within a family often spur will contests that do not seem worth it in any economic sense. <\/p>\n\n

In America, will contests are generally tried to a jury, giving the contestant the hope that the jury will seize on any legal hook, however flimsy, in order to “normalize” the testator’s estate plan. When a will contest succeeds, a prior will may govern \u0097 or if there is no prior, unrevoked will, the law of intestacy, described above, takes over. <\/p>\n\n<\/b>

Anna Nicole Smith’s Will Contest<\/p>\n\n

Anna Nicole Smith filed, but ultimately dropped, a claim against her late husband’s estate. Would a jury have found J. Howard Marshall’s will to be abnormal because it disinherited a lawful spouse, and “normalized” it with a large award to Anna Nicole Smith? Or would the jury have left Smith out in the cold, finding it entirely normal that Marshall decided to disinherit a much-younger wife from a short-lived marriage (after two previous thirty-year marriages), and leave his money, instead, to a loyal adult son? <\/p>\n\n

As explained in Part Two, Anna Nicole Smith’s legal status is complicated by dueling court cases (one in probate court, one in federal bankruptcy court) and convoluted legal claims. Whether she ultimately would have been able to share in J. Howard Marshall’s estate is far from clear. <\/p>\n\n

Read Part II of Professor Grossman’s article.<\/a><\/p>\n\n<\/span>\n\n\n

\n\n\nJoanna Grossman, a FindLaw columnist, is an associate professor of law at Hofstra University, where she teaches Trusts and Estates, among other subjects. The second column in this series analyzes the specific legal claims raised by Anna Nicole Smith and her two stepsons in the ongoing trial over J. Howard Marshall’s estate. \n

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