Author Tom Clancy’s Estate Litigation Finally Concludes
Nov. 1, 2016
Estate administration and trust litigation too often go hand-in-hand. This post explores the importance of proper estate planning.
Back in November 2014, we noticed an interesting article in the Wall Street Journal regarding the estate administration and resulting litigation of best-selling author, Tom Clancy. Mr. Clancy’s estate consisted of a family trust which designated his widow as the primary beneficiary; a separate trust awarded assets to his four children from a prior marriage.
Among the items in the sizable estate were a 12% stake of the Baltimore Orioles, a Chesapeake Bay home, six penthouse condominiums on Baltimore’s harbor, 26 collectible handguns and long guns, and even a rare World War II tank.
A dispute arose when Clancy’s widow claimed the decedent’s estate should not be liable for millions in estate taxes. Ms. Clancy claimed that it was Mr. Clancy’s intent that the children’s trust pay all estate taxes. Mr. Clancy’s children disagreed; they asserted the tax liability should be split evenly between both trusts.
That dispute, which lasted nearly two years, recently resolved with a Maryland Court of Appeals ruling. The appellate court held that the widow’s trust was not liable for any taxes. The court further ruled that all of the $11.8 million dollar tax bill was to be paid from the $28.5 million children’s trust.
Probate Judge Lewyn Scott Garrett had determined Ms. Clancy’s inheritance should be entirely tax free. Specifically, the judge pointed to language that he claimed offered the clearest and most predominant evidence of Mr. Clancy’s intent.
This case is a prime example of the importance of having a properly executed estate plan in place. Even Tom Clancy, an author whose estate was worth an excess of $83 million, didn’t have a plan in place that would keep his estate free from litigation.
Although his estate plan involved a complicated series of trusts, the language was sufficiently imprecise to precipitate probate court litigation. The case points to the importance to be clear in all estate planning documents relative to the intent of the settlor(s) or grantor(s) of the trust package.
In this particular instance, lack of precise trust language addressing the estate tax issues caused a dispute that could have been avoided. By not having this language, the estate went to litigation. This likely resulted in tens of thousands of dollars in unnecessary attorney and court fees. Further, it also caused nearly two years of needless stress for members of the family.
Mr. Clancy’s case demonstrates that a proper estate plan avoids disputes between common adversaries: a decedent’s children and a subsequent spouse. Mr. Clancy, with his trust package, died thinking he has a solid estate plan. Unfortunately, despite his detailed planning, his lawyers missed the tax issue.
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Because the corpus and circumstances of a trust and its beneficiaries change over time, the constant diligence of a skilled estate planning lawyer is essential.
Our law firm offers free consultations to evaluate your estate plan. If you would like to explore your estate planning options, contact us to schedule an evaluation.