A Simple Will Doesn’t Mean a Simple Probate

You hear about simple wills all the time. Usually, it means someone executed ‘just’ a will, a will that took care of everything without the need for trusts. You know, simple. We find that a lot of people also think: simple will, simple probate, no problems, no worries. It’s a natural enough assumption to make. But, it’s unfortunately just not true.

We all know Marilyn Monroe. Sex symbol, actress, singing happy birthday to JFK, Some Like It Hot, and … current day Snickers pitch woman? An icon, and a symbol of what can go wrong with a simple will and one probate decision.

Marilyn Monroe may have invented the stereotypical ‘dumb blonde’ but she was anything but. Despite a tough childhood and very little formal education, Marilyn was a voracious reader looking to learn whatever she could about a great many things.

In the mid-1950s she figured out that she was vastly underpaid in relation to her male co-stars. She fought the studios for the right to form her own production company and used that as leverage to be paid considerably more when doing studio projects.

She was a smart, tough business woman and despite the fact she died at 32 she had done estate planning. As a matter of fact, her simple will was very well thought out.

Marilyn, of course, died in California, but she was a New York.resident. She moved to New York – Sutton Place, in fact – when she married Arthur Miller in 1956 and considered herself a New Yorker.

Marilyn, obviously, spent a lot of time in California making movies, her executors, then, had a choice of domicile for her estate. At the time, New York’s estate taxes were much lower than California’s. The executors chose New York; the estate tax was $800.

Simple, right? They paid a little estate tax. retained the rights to Marilyn’s image, made money for her heirs for a couple of decades.

The executors were pretty vigilant protecting their right to be the only ones that could license her image. They could get nasty about it, and did with a guy in Indiana in the late 1990’s. It was an enormous mistake. One that they exacerbated it by filing cease and desist orders and all that.

The guy they were suing turned around and brought an action against the estate. He claimed that the estate wasn’t due a dime because New York State did not recognize the right of an estate to earn income on the likeness of the deceased. In other words, New York didn’t recognize this as a property right that could maintain a civil action.

He was right. Marilyn’s estate quickly found itself in the unique position of arguing in a U.S. District Court that Marilyn was indeed a California resident. California, by the way, recognized ‘publicity rights.’

The court was not amused and in 2011, in a pithy decision that had a lot to say about trying to ‘have it both ways’, denied the request.

Millions were lost.

All because of a decision made in 1962-3 solely to pay the smallest tax possible. In the tax industry this is known as letting ‘the tax tail wag the dog.’

Decisions made early in the probate process n event he simplest of wills can have long, reverberating consequences. Any questions, please give us a call