Central Texas-tied probate cases highlight estate abuse threats

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Central Texas-tied probate cases highlight estate abuse threats


July 26, 2011

Two legal cases with central Texas ties provide interesting opportunity to discuss questionable probate actions. Anna Nicole Smith – and now her estate’s – pursuit of J. Howard Marshall II’s multi-million dollar estate has long made headlines and a recent court filing could open a new front in an action already ongoing for 15+ years. Meanwhile, the indictment of Waco attorney Ray Rushing along with former caregiver Melissa Adler presents an important example of another path by which alleged estate abuse can occur. While one case is a civil action and the other is criminal, while one involves a high-dollar estate and the other more modest asset values, the public must become aware of the dangers posed by Involuntary Redistribution of Assets (IRA) actions in which probate venues and probate instruments (wills, trusts, guardianships and powers of attorney) are used to divert assets from the dead, disabled, incapacitated and/or their intended heirs or beneficiaries.

The first case involves the saga of former Mexia resident Vickie Lynn Hogan who became famous as Anna Nicole Smith and infamous through waging a legal battle against Marshall’s designated heir upon the elder Marshall’s death 14 months into their marriage. Smith’s initial claim for half of the Marshall estate was based upon an oral promise she alleged that J. Howard Marshall II made. No physical evidence existed to support the claim with all estate planning documents naming Marshall’s son Pierce as his intended beneficiary.

A seven-month Houston probate trial allowed a jury to examine alleged beneficial entitlement by both Smith and a disinherited son, J. Howard Marshall III and culminated with a 2001 finding that neither claim was credible. A concurrent California bankruptcy action provided Smith’s team an additional legal front in which to keep the estate pursuit open. Despite Pierce Marshall’s 2006 death and Smith’s 2007 death, that action served as the basis for today’s continued challenge.

A new filing is now seeks to delay a final federal court ruling while an appeal of the Texas probate court’s decision against Smith’s claim is pursued. This new avenue would likely be prolonged, complicated and expensive further catapulting this case – seen by many as nothing more than a desperate money-grab – further into a never ending exploitative legal wasteland.

One need not be a lawyer but only an attentive observer to see that too often when these cases get going, reality becomes unimportant and integrity is supplanted by legal gamesmanship, billable hours generation and blatant disregard for final wishes. Upon applying a little common sense and analytical ability, the case now known as Stern v. Marshall appears nothing more than an attempt to use an unsubstantiated claim and the legal system to extort assets received via a legitimate inheritance. And fighting the battle takes on extra importance because if the Smith estate were to ever see a real court victory resulting in a financial distribution (and the setting of legal precedent), the inheritance rights of all Texans – maybe all Americans – would be seriously threatened.

In the other central Texas case, a McLennan County Grand Jury indicted both Ray Rushing, general counsel for the Texas State Technical College system, and Melissa Adler on four identical felony charges. Court documents indicate the charges are based on Adler’s relationship with Eugene Handley, an elderly man for whom she cared in a professional capacity.

Adler is described as continuing a relationship with Handley despite discontinuing her caregiver role while Rushing prepared a new will that eliminated prior heirs and bestowed Handley’s estate to Adler. Court documents assert that Rushing later executed the will which he knew to be invalid based on improper witnessing and notarization and also because Handley was not competent to have executed such a document. For these efforts, Adler is said to have paid Rushing $5,000 out of Handley’s estate around November 2005.

The indictment repeatedly refers to the overall estate value as “more than $100,000 but less than $200,000.” This amount is key as it illustrates how estates of all sizes can be targets of looting efforts. Probate abuse cases routinely contain identifiable patterns or occur within predictable scenarios. While the presumption of innocence must always be maintained, this case appears to contain many familiar elements.

The prosecution of this case as a criminal matter is interesting. Steal $250,000 from a bank, it’s a criminal act. Divert the same amount from intended beneficiaries in an estate and you’re usually relegated to the “pay-to-play” civil court system which is expensive and, for many, simply cost prohibitive. This point is well known to legal practitioners and other would-be looters while the public’s ignorance of such realities enhances their vulnerability. Why this case – especially with the value involved – is being prosecuted criminally remains unknown for now, but such treatment of these cases is always welcomed as an important deterrent of potential future acts.

With the transfer of wealth that is getting ready to occur in the upcoming years, the Involuntary Redistribution of Assets will likely skyrocket. People think proper estate planning will protect them – wrong! People think they don’t have enough assets to be a target – wrong!! No inoculation currently exists from the IRA threat, but using current cases to educate the public of looming dangers is an important step toward combating abusive probate actions.

Lou Ann Anderson is an advocate working to create awareness regarding the Texas probate system and its surrounding culture. She is the Online Producer at http://www.estateofdenial.com/, a Policy Advisor with Americans for Prosperity Foundation – Texas and a Director of Women on the Wall. Lou Ann may be contacted at info@EstateofDenial.com.

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