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The Ongoing Feud of The National Enquirer Heirs

Perhaps this tale should be unsurprising considering it involves heirs of the tabloid fortune built around the concept:  ”Inquiring minds want to know!”  Two of the heirs of the tabloid founder, Generoso Pope, have engaged in dueling lawsuits for years — culminating in allegations of kidnapping, fraud, extortion, and even an arrest for criminal stalking.  All between a son and his mother.  National-enquirer

Generoso Pope was the founder of the National Enquirer.  He died in 1988, leaving behind a will and trust that called for the company to be sold. Generoso’s youngest son, Paul Pope, desperately wanted to buy and run the tabloid, but was unable to raise enough money.  Reportedly, it sold for $412.5 million, with $200 million going to Lois Pope — Generoso’s widow and Paul’s mother — and $20 million for each of the four children, including Paul.

According to Paul, about $186 million from the estate funded a marital trust created by Generoso.  As would be typical of a marital trust, Lois was to receive all of the income from the trust while she was alive, and the rest would pass onto the children when she died.

That’s not a bad family fortune, especially considering it started with a $75,000 loan from the mafia (again, according to Paul Pope).  The problem for Paul is that it hasn’t been enough — at least, not enough for him.

He blew through his share of the inheritance with a lavish lifestyle and turned to his mother for more.  Lois Pope was reportedly willing to help out — quite generously so, she says — but it was never enough for Paul.  So the lawsuits started.

Specifically, in 2006, Lois Pope sued Paul for breach of contract, claiming he reneged on a $340,000 promissory note to her.  Paul counter-sued, alleging his mother promised to buy him a $5 million home and provide him with a lifetime of income of $1 million per year.  Paul even issued a detailed press release describing the allegations of his counter-suit.

In the press release, Paul alleged that his mother, as a co-trustee, mismanaged the marital trust and invested the assets so that she maximized her income at the cost of growth (far less than what the trust assets should have earned, not even keeping pace with inflation, he claims).  Paul also said his mother used a charitable institution she ran, the Disabled Veteran’s Life Memorial Foundation, to cover the cost of lavish parties for she and her friends, donating only 6% of the money raised to the charitable causes it was created to benefit.  He even claimed his mother uses a private jet to shuttle around her 18 dogs.

Lois Pope and her legal team denied all of the allegations, and the earlier lawsuits were eventually resolved.  But, that did not stop the feuding.  In late 2012, Lois says Paul began pushing for more money, again.  She says she had given him $8 million already and bought him a yacht, in the last few years alone, but Paul demanded more.

His demands became so aggressive, according to Lois, that she obtained a restraining order against him and even brought criminal stalking charges that resulted in his arrest — during Mother’s Day weekend of this year, no less. Lois said she was so scared of her son that she hired a full-time security detail and considered wearing a bullet proof vest to social events, under her fur coat.

Paul, consistent with previous behavior, launched a lawsuit of his own against his mother.  This time, he claimed she attempted to intimidate and threaten him by taking out kidnapping insurance on his children, against his wishes. He sought $5 million for intentional infliction of emotional distress.

Recently, the feud appears to have reached a resolution — at least temporarily — with Lois agreeing to drop the criminal charges and Paul dismissing his kidnapping lawsuit.

But, Paul has also recently claimed that his mother and other trustees have hidden away millions of dollars in offshore accounts.  He stated that the only assets that were transferred to the trust were the National Enquirer sale proceeds and the family home.  He demands to know what happened to the rest of what he believes were his father’s assets.

Clearly, this is a family feud that will not soon be over, if ever.  Lois Pope is 79 years old and may have to deal with Paul’s allegations and accusations for the rest of her life.

This case highlights a type of feud that is more common than most people realize.  Probate battles over management of trusts, especially where the trustee is also a beneficiary, happen to many more families than the rich and famous.  While a son and mother fighting each other is not typical, feuds between second spouses and children from prior marriages, or between siblings, often boil down to accusations that a trustee is using his position of trust to benefit himself at the expense of other beneficiaries.

That’s not to say that the allegations raised by Paul Pope against his mother are true.  And certainly, some of the specific claims he makes — involving kidnapping insurance and wasting money flying dogs around in a private jet, for example — are obviously atypical.

But others are not.  A spouse who is a trustee or co-trustee of a marital trust, entitled to receive income and invade the principal under certain conditions, can often be placed in a conflict situation.  If she takes out too much money for her own needs, or manages the assets to benefit herself in the short-term while sacrificing the long-term interests, it can lead to fighting and lawsuits by the residual beneficiaries.

It does not even have to be a true breach of fiduciary duty.  Rather, the other heirs may feel the trustee is taking too much or investing improperly and sue, even when he or she is doing everything right.  It can sometimes be a no-win situation.

That’s why those who create marital or other types of revocable trusts should be careful about whom they name as trustees, especially in those families of second marriages, siblings who do not get along, or those with unusual eccentricities (as with the Pope family).  There is no easy answer or common formula that is right for every family. Choosing a spouse may make the most sense in many cases.

But, in others, putting the spouse into the position of a co-trustee, setting up a potential conflict situation, may only lead to fighting.  As the National Enquirer heirs have demonstrated, that fighting can be downright nasty.

On the other hand, considering how that family fortune was built, some may say it’s fitting.

By Danielle and Andrew Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!  For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update.  You can “like” them on Facebook and follow them on Twitter.

For legal help in Michigan, visit Danielle and Andy's law firm.