Ethan R. Okura
Hawai‘i Herald Columnist
’Tis the season to be jolly and it truly is the most wonderful time of the year . . . except for when it’s not. Most of you, like me, are probably busy preparing for the holidays. Estate planning is probably the last thing on your mind. What’s on your minds instead? Parties you’ll be hosting, toasting marshmallows over an open fire and caroling out in the rain! We’re thinking about being with family and loved ones. After all, that’s what this season is all about.
Thoughts of merriment, but the reality of life and issues such as estate planning lead me to the subject of this month’s column — Tom Petty.
Many of you have probably heard of Tom Petty, the rock star. He wrote and recorded chart-topping hits for decades. Unfortunately, he passed away a little over two years ago . . . and his estate is still not settled because his widow and his two daughters from a previous marriage are fighting a vicious battle in court over how to interpret his trust.
If this storyline sounds familiar, it’s because in past columns, I’ve written about the families of Aretha Franklin and Prince fighting over their rock star relative’s estate.
So what’s all the fuss about? Why are they fighting? It all comes down to ambiguity. At the center of this dispute are six crucial words in Petty’s trust. This is where an average lawyer can inadvertently leave your family and loved ones with a major headache after you’re gone.
Petty had named his wife Dana as his trustee, but his trust also required her to transfer the artistic properties (all of his music rights, his name and image and other intellectual property) to a new limited liability company, or LLC. That’s simple enough to understand and do. However, the trust also states that Dana and his two daughters, Adria and Annakim, “shall be entitled to participate equally in the management of the Artistic Property Entity.” Uh-oh!
On its face, “shall be entitled to participate equally” would seem to have an obvious meaning in English, right? Well, think about it: Did Tom Petty want all three of them to have an equal say — in which case the daughters can gang up against their stepmom and always have their way, or did he want his wife to have an equal say with his two daughters? It’s not clear.
As expected, the daughters are arguing that two out of three majority votes should control the LLC, and Dana, the widow, is arguing that she wouldn’t be able to participate in the management of the Artistic Property Entity at all if the trust language is interpreted that way because she would always be overruled.
If the attorney preparing the trust had thought about this potential problem, he or she could have prevented it by asking Petty what he meant by the word “equally.” The attorney could then have drafted the trust to clearly express Petty’s intentions.
But, the attorney did not, so the court pleadings are full of arguments accusing each other of wrongdoing. Petty’s wife suggests having a professional manager, Larry Jenkins, manage the LLC. Dana claims this was originally daughter Adria’s idea, but when Jenkins didn’t do everything Adria wanted him to do, she changed her mind about him.
Unfortunately, it affects more than just the Petty family members. The rock star’s fans have been waiting to get some never-released recordings from his original 1994 album sessions. Petty had intended his biggest hit album, Wildflowers, to be a double LP album, but the record label nixed the idea, so only half of the material made it onto the wildly successful album. He had planned for a 25th anniversary release of the full album in 2019, calling it “Wildflowers: All the Rest.” However, this legal battle is now holding up the release of the music.
So, if you’re a Tom Petty fan and “Wildflowers: All the Rest” was on your Christmas wish list, don’t hold your breath.
What can we learn from this case? Well, you don’t have to be a rock star with a multimillion-dollar estate for your family to fight over. If you haven’t already done so, put together a solid estate plan. If you’ve already gotten one done, get it reviewed by a competent attorney and make sure that it fulfills all of your goals. Then, with peace of mind and gratitude in your heart, go enjoy the holidays with your family and loved ones.
© OKURA & ASSOCIATES, 2019
Honolulu Office (808) 593-8885
Hilo Office (808) 935-3344
Ethan R. Okura received his doctor of jurisprudence degree from Columbia University in 2002. He specializes in estate planning to protect assets from creditors, probate, estate taxes and nursing home costs.
This column is for general information only. The facts of your case may change the advice given. Do not rely on the information in this column without consulting an estate planning specialist.
