With thanks to Joshua Rubenstein, Katten, for his talk on the below. 

Making a mistake is never the end of the world, so long as it isn’t repeated – and how much better to learn from someone else’s mistakes. Here, we look at famous disasters in family succession and what we can learn from them. 

Four Time-Honoured Recipes for Disaster…

1. Marrying the ‘trophy’ spouse

Henry Ford II was the grandson of the eponymous automobile maker. He made his fortune in Detroit and moved to Palm Beach, Florida, and at the age of 62, he married his third wife, Kathleen Du Ross, who was then 39 years old at the time of marriage. He died there in 1987. 

Henry Ford II left $350 million dollars under a simple will that had no conditions, and  it all went into a trust that he thought would be kept a secret – except it was no secret that he died, so everybody contested the trust.

He had named Kathleen as the sole beneficiary of his trust, but stipulated that when she died, his six grandchildren would become the beneficiaries. He was survived by two ex-wives, three children (including one son, Edsel), and six grandchildren. He had named three people to manage the trust: Kathleen, his son Edsel, and a friend Martin Citron, who killed himself soon after Ford’s death. Martin’s successor trustee was William Donaldson, a friend and ally of Edsel.

The trouble began in earnest when William Donaldson requested $1 million per year to manage the trust, while threatening to cut Kathleen’s income to $1.5 million per year. 

In the end, the efforts to take money from Kathleen backfired. The court awarded Kathleen 10 times more than what the will said, Donaldson saw his pay cut in half, and Edsel received nothing. However, this action it opened the door for the ex-wives to contest the will because they hadn’t realised how wealthy Ford had been…

2. Marrying the caretaker

Seward Johnson, heir to the Johnson & Johnson fortune, died in 1983 in New York aged 87. His third wife was a recently integrated chambermaid in his household, named Barbara Piasecka who was aged 34 to Johnson’s 76 at the time of their marriage. 

When he died, he was survived by six children from two prior marriages, and his wife Barbara. Six weeks before his death he changed his will, leaving his entire $600 million estate entirely to Barbara, and naming the associate at a major Manhattan law  firm who drafted the will as the sole executor of his estate, to earn a statutory commission of $10 million. 

The children claimed that Barbara had undue influence  on their father and had taken advantage of their father’s condition, because they had all been effectively cut out of the will. Barbara pointed out that, during his life in 1944, Seward had created for  each one of them a trust with $110 million each, and that they had all managed to spend  all the money – horrifying their father. The last few wills had left them consecutively less and less. 

After a litany of dramas and court bills amounting to $24 million, the children received 8% of the estate, Harbor Branch (an oceanic institute founded by Seward) was awarded $20 million, and Barbara was awarded the rest. A lawyer in the case was quoted as saying ‘never was so much, from so few, divided by so many’.

3. Deathbed marriages

In 1994, Howard Marshall – petroleum tycoon at Koch – married model Anna Nicole Smith when she was 26 and he was 89. They met and married in the last 14 years of his life.

He promised to leave one half of his estate to Nicole when he died, but he died with a will that left everything to his son, Pierce. She brought a probate contest and lost because the will was completely valid. Because of her own spending habits she declared bankruptcy. In the bankruptcy proceedings, the lawyers found that Howard Marshall had tried to do exactly what he had promised, and had put half of his wealth into a revocable trust for her. While in the bankruptcy court, Anna filed a counter-claim against Pierce, citing tortious interference with estate planning as her reason. 

The court awarded Anna with half a billion dollars. It was then retracted. The case then went to the US Supreme Court, which is highly unusual. They sided with Anna and sent it back down to trial. 

Most people died before this case was decided – both Pierce and Anna. She had left everything in her will to her 20 year old son from a different father, and since she had a little girl – who had several claims of paternity. The will, however, had left everything to this 20 year old who predeceased her. 

There was a huge war over this half a billion dollars, which rages on to this day. 

4. Balancing too many families at the same time

HL Hunt was an oil tycoon. When he died in 1974 he was the wealthiest man in the world. He believed that he had a genius gene that he was obligated to share with the world, and so secretly supported three families at the same time in Texas. None of them met or knew about the others. They met at the funeral and were not happy. 

He was married to the woman of Family 1, but she predeceased him so he married the mother of Family 2 and legitimised the children of that marriage. He then predeceased the mother of Family 2, so never had a chance to legitimise the children of Family 3.  

He left most of his estate to Family 2, and Family 1 wanted to contest the will. However, the then matriarch of Family 1, Margaret Hunt Hill pointed out that each member of Family 1 had been offered $4 billion – and that they didn’t need more, and nor did they need the publicity. During her life she was able to convince her family not to make a public scandal, but when she died aged 91 all the enmity came out and her grandchildren sued Family 2 to try and get the money back. 

What are our takeaways?

No one likes a surviving spouse who is younger than the children…

Don’t give a child a really embarrassing name, and then cut them out of a will…

Don’t give children so much money that they can afford to contest…

No, really:

Be careful who fiduciaries are. Go with corporations where possible. 

Claiming issues. Do not let inheritances come as a surprise after death – make sure everyone is warned. So many of these come from problems of communication, where people assume it has been tampered with. 

Remember that families don’t necessarily love each other. They are usually held together by one person they love in common, but when they’re gone all hell can break loose.