How did this happen? The case began about when Smith discovered that her husband had left her out of his carefully written will and estate plan. After consulting with attorneys including legal svengali Howard K. Stern, she challenged his will in a Texas probate court. After he died, she claimed that even though she’d specifically been left out of her husband's written will and estate plan, she—unbeknownst to anyone else—had been verbally promised a portion of his estate. After a probate trial in Texas lasting nearly six months, the jury ultimately ruled against her on all counts.
But Smith's legal team proved tenacious, and willing to subvert the system. Before the Texas verdict was issued, they leapfrogged to a federal bankruptcy court in California. There they were able to get their biggest win - nearly half a billion dollars - by convincing the bankruptcy judge to ignore much of the legal arguments, witness testimony and evidence that had been given in the Texas trial. A federal district court in California would subsequently reduce that win by three-quarters, and the 9th Circuit Court of Appeals threw out the remainder on appeal, saying that the entire dispute should not have been heard outside Texas.
In a successful appeal to the Supreme Court—which caught most court watchers off guard—her legal team won a narrow victory keeping the case on life support. Invoking a jurisdictional technicality the Supreme Court returned the case to the 9th Circuit in California for a second review, where it remains today.
The tactics and legal skirting that Anna Nicole’s legal team have employed could dramatically change how all families – billionaires to working class -- build and share wealth. As baby boomers look toward the future and begin planning how they will share their wealth within the complex modern family structure, they should also keep on eye on Marshall v. Marshall and what this decision could mean to them.
Despite its limited legal prospects, cases like Smith’s ultimately crowd out deserving cases, rack up hundreds of thousands in legal fees and set an attractive precedent for future abuse. Beyond the legal fees and the burden on the courts, however, the cost of this legacy will likely persist long after the last tabloid expose of Anna Nicole Smith is written.
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