Many people avoid making a will because they assume they will die without leaving a probate estate. And while estate planning can help keep many assets out of probate, you should always prepare for unexpected claims that may arise after your death. For example, if your death is the result of medical malpractice or a defective product, a probate estate may be necessary to pursue civil litigation against the responsible parties. Recently a California appeals court addressed such a case involving the estate of a one-time Hollywood star whose death prompted an extended legal fight between his sister and a biological child he later acknowledged as his own.
In re Estate of Johnson
Troy Donahue was a well-known Hollywood actor during the 1950s and 1960s best remembered for co-starring in the 1959 film A Summer Place with Sandra Dee. Although married four times, Donahue died unmarried in 2001. In 1987, Donahue met a woman who claimed to be his biological daughter. She was adopted at birth in 1964. Donahue nevertheless accepted the daughter as his own and maintained a relationship with her and her children until his death.
Donahue, whose real name was Merle Johnson, died without a will. Donahue’s obituary reported the cause of death was a heart attack. But the daughter later received information suggesting the use of the prescription drug Vioxx caused her father’s death. In 2005, the daughter hired a lawyer to join a class action against Vioxx’s manufacturer. But this required opening a probate estate for her father in California.
As the daughter lived in Arizona, she asked Donahue’s sister, his closest living relative, to open the estate and serve as administrator. The daughter covered the estate’s legal fees. The probate petition further explained the daughter’s relationship to Donahue.
The daughter acted under the belief the sister was acting solely to help her recover any proceeds from the Vioxx litigation. Accordingly, the daughter accepted a settlement netting $190,000 for the estate. At this point, the sister and the estate’s lawyer informed the daughter since she was adopted by another couple at birth, she had no legal right to inherit from Donahue’s estate.
The sister filed a petition in California probate court seeking a declaration she was Donahue’s only legal heir, and therefore the settlement money belonged to her. The daughter objected, arguing the sister was “equitably estopped” from challenging her right to inherit.
Equitable estoppel is a legal term that basically means a party to a lawsuit cannot say one thing and do another. More specifically, California law states, “Whenever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it.” In cases of equitable estoppel, a court may act to prevent an “intolerably unfair” outcome.
Here, the probate court, and later the Court of Appeal, determined the sister “manifested the intent to relinquish any of her inheritable stake in the Vioxx litigation.” Based on this, the daughter “paid the legal fees necessary to have [the sister] named estate administrator in order to pursue the Vioxx litigation, and then invested time and effort in moving that case along.” The court said the sister had acted out of “a sense of moral obligation to her late brother’s presumed wish” to benefit his biological daughter, regardless of her inability to inherit from him under law. Accordingly, the court awarded the daughter the proceeds of the Vioxx litigation “as Donahue’s heir.”
It should be noted absent the application of equitable estoppel in this case, the sister was correct to argue the biological daughter had no statutory inheritance rights under California law. Even if Donahue would have wanted her to have the money, his failure to leave a will contributed to the subsequent litigation. A will certainly would have clarified who was responsible for the administration of the probate estate.
If you need advice on making a will or any related subject from an experienced California estate planning attorney, contact the Law Office of Scott C. Soady in San Diego today.