Estates & Wills & Trusts

Tom Petty estate dispute offers lessons for testators

By AdvocateDaily.com Staff

Celebrities are just like the rest of us when it comes to estate disputes, says Toronto wills and estates lawyer Matthew Urback.

Billboard magazine recently reported on the ongoing and escalating battle between Tom Petty’s widow and the daughters of the musical superstar, who died from an accidental drug overdose at the age of 66 in 2017.

“This is a dynamic we see all the time in disputes, whether the estate is large, small or somewhere in between,” says Urback, partner with Shibley Righton LLP. “Issues between the spouse and children of the deceased frequently arise, particularly in situations where you have a second marriage, and the surviving spouse is not a parent of the children.

“Nobody is immune to these kinds of problems, which seem to almost transcend economic status,” he tells AdvocateDaily.com.

According to Billboard, a series of lawsuits have been filed in California courts by the singer’s two daughters and his wife, with each side accusing the other of standing in the way of the late star’s wishes.

In one case, a daughter alleged Petty’s wife prevented the sisters from “participating equally in the management” of their father’s estate by restricting the flow of his assets into Petty Unlimited, a company he created so that his two children and second wife could share the proceeds of his legacy, Billboard reports.

Another claim commenced on behalf of that company seeks $5 million in damages from Petty’s wife, accusing her of setting up a new entity, Tom Petty Legacy, “as a vehicle through which to deprive” it of the singer’s assets.

Meanwhile, the magazine reports that Petty’s wife launched her own action accusing the sisters of thwarting her role as “directing trustee” of Petty’s estate. All of the allegations have yet to be tested in court.

Although the details of the cases are murky, Urback says there are lessons for testators who wish to minimize the chances of expensive litigation between beneficiaries after their death.

For example, he says people will frequently appoint multiple executors without giving much thought to the issue.

“If you are granting more than one person authority to deal with your assets, it’s important to consider the dynamics between those people, and whether they can get along,” says Urback, who is not involved in these cases and comments generally.

Testators can add another layer of protection by inserting a dispute resolution clause that governs how trustees should proceed if they cannot agree among themselves.

In estates where more than two trustees are appointed, a majority vote may be suitable, Urback says, but even then there could be trouble.

“In the Tom Petty case, the daughters are saying they want ‘equal participation’ with the wife in decisions, but that term is a little ambiguous in this case because there are two of them and only one spouse. If they each got one vote, then the sisters would be able to win by voting in a block,” he says. “That’s a good example of how a phrase that appears clear when it stands alone might mean something else entirely in a different context.

“Testators may need to tweak common words and phrases to consider the circumstances of their own family and estate to ensure their intentions are reflected,” Urback says.

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