L'Oreal Heiress, Liliane Bettencourt, Subject to Guardianship
Pass The Turkey With A Side of Celebrity Estate Planning Stories (Part I)

James Brown Estate Battles Through Debt and Extended Fighting

The Godfather of Soul died on Christmas Day, 2006. His estate has been marred by fighting ever since. Here’s our Forbes recap of the legal troubles which have left James Brown’s estate and wishes in limbo.   James Brown

The Associated Press reported last week that the court battles devastated his estate so much that his charitable trust had dwindled in value all the way down to $14,000, with $20 million of debt, until a 2009 settlement.  This was quite a drop, because original estimates of the value of Brown’s estate came in at the $100 million mark.

The settlement — which was supposed to end all of the fighting — called for about half of Brown’s assets to pass to a charitable trust, with one-quarter going to his widow and the rest passing to all of his children.  The deal also led to the court appointment of a new attorney to administer the estate, Russell Bauknight.

When Bauknight became involved, he hired a professional music manager, who struck new deals for Brown’s music to be used in commercials throughout the world for products like Chanel and Gatorade.  According to Bauknight’s attorney, because of his efforts, Brown’s estate has almost finished repaying the large debts and is ready to — finally — start passing money onto charity.  He says that thousands of college scholarships for needy students will be created as early as next year.

But, the fireworks are not over for the estate of the musician known as “The Hardest-Working Man in Show Business.”  The lawyers are working hard too.  A few days ago, the South Carolina Supreme Court heard arguments from them to decide if the settlement should be thrown out.  Two former trustees have been fighting since 2009 to undo the deal.

The former trustees, Adele Pope and Robert Buchanan, say they were ousted from control because they objected to the settlement.  They feel the South Carolina Attorney General wrongly intervened to push the settlement through, without their participation.  They want a much larger share of Brown’s assets to benefit poor and needy children, as Brown’s trust document spelled out, without so much going to family.  They also want to be back in control.

Bauknight’s attorney says that allowing the pair “back into power would be similar to throwing a grenade into the James Brown musical empire.”

This case highlights the problems with estate battles.  They tend to be expensive, emotional, and drag on and on and on.  And no, they don’t just happen to the estates of the rich and famous.  Heirs battling for a share of trust and estate property, or over family heirlooms, joint bank accounts, life insurance, or a number of other assets, are all too common in our country, especially in this economy.

And the biggest reason why conflicts like this happen?  Poor estate planning. When the documents are done the right way, before there is a question of mental competency, it’s a great start.  But then it’s important to keep wills, revocable living trusts, and other legal documents updated, especially after life events like marriages, births and divorces.

James Brown didn’t update his documents after his marriage or after the birth of his last child, James Brown II.  That opened the door to the fighting, which is going on five years now.  There were also claims raised by family members that he was subject to undue influence.

The family and others involved in his estate and trust should be commended for reaching — or at least trying to reach — a settlement.  No one wins when estate battles drag on this long … except the lawyers of course.  Families are usually smart to find a middle ground and reach a compromise, rather than prolonging the fight.

Sadly, despite the settlement, Brown’s family members and charities have not seen a dime of his money, despite the impressive work by those in charge to take Brown’s estate out of the red and into the black.

By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of the national television special, Trial & Heirs:  Protect Your Family Fortune! 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 and Google+.

For legal help in Michigan, visit Andy and Danielle's law firm's websites, The Center for Elder Law and The Center for Probate Litigation