International Issues for California Estate Litigation

International Issues for California Estate Litigation

• March 2, 2020 - Estate Litigation,

In the current age of digital information and global business, many estates present complicated issues involving international law. A testator may execute a will in one country and eventually die in another. Different countries across the world may harbor assets. Different tax regulations, probate laws, and administrative regulations may apply in each of these countries.

All of these complications can raise disputes among beneficiaries and increase the chances of probate litigation. The experienced Los Angeles estate litigation attorneys at Hackard Law also serve areas throughout California, including Sacramento, San Francisco, Alameda, and Santa Clara. Here, they explain some of the complicated legal issues present within international estates.

A Case Study of Johnny Hallyday

The case of French rock musician Johnny Hallyday demonstrates many of the complex legal issues presented by an international estate. Hallyday executed a will in 2014 in California before he died in his Paris home and was interred in the Caribbean in December 2017. The Guardian reports that his two eldest children are now challenging the California will in a French court.

The will provided for Hallyday’s wife and younger, school-aged children, but not for his adult children. French law provides automatic inheritance rights for all children. Because of this, the outcome of the case will largely depend on whether French or California probate law applies to the case.

Hallyday and his wife had most recently lived in Los Angeles. Yet Hallyday died in Paris, and many of his assets remain in France. A French court, therefore, froze many of his French assets in anticipation of probate litigation over the singer’s estate. His wife told reporters she was content with this ruling, as it did not affect the couple’s American holdings. The litigation could easily span the course of many years, and will likely cost thousands (if not millions) of dollars in litigation expenses.

The Hallyday case brings up many important issues, such as which country’s law applies to the estate of a person with international connections. Estate planning documents can reduce some of these issues. An irrevocable trust, for example, can help protect assets from estate claims of potential heirs. Writing a will with specific provisions of the laws of a given state (or country) can also increase the chances that the will can be submitted to probate there. Including “no contest” provisions can also reduce the chances of estate litigation, and these provisions can also include challenges to the testator’s choice of international law. While this may not prevent a foreign court from exercising its jurisdiction under its own judgment, it can decrease the chances that a potential heir will initiate such litigation.

Next, the Hallyday case illustrates how an estate may not fall entirely under the jurisdiction of the courts of a single country. The French court froze Mr. Hallyday’s French assets because it did not have jurisdiction over his American assets. In time, the French court may make ultimate disposition of his French assets, while a California court retains jurisdiction over his will and Los Angeles holdings.

Appropriate estate planning strategies can reduce the likelihood of such confusing situations. A testator, for example, can place real estate assets under a holding company. Trusts can make provisions for assets after a grantor’s death. Testators can use other explicit instructions and legal tools to protect assets from estate claims. Explicit planning can reduce ambiguity in estate administration, which, in turn, reduces the chances of probate litigation after a person’s death.

International Issues in Estates Involving Unique Types of Businesses

Some estates involve unique types of businesses. This presents an added complication to an already complex situation involving international estate litigation.

Consider the estate of Walter Becker, co-founder of the rock band Steely Dan. Forbes reports that his widow demanded a one-half ownership interest in the band from co-founder Donald Fagen. Fagen is now suing Mrs. Becker to retain full ownership of the band. He relies on a 1972 agreement that allowed him to purchase Becker’s interest in the band. Mrs. Becker claims the agreement is invalid, and that she is entitled to one-half ownership. This would include management rights, decision-making authority, and other matters beyond a simple financial interest in the band’s profits.

This situation grows even more complicated due to international issues that may also arise during the course of litigation. The band likely receives royalties from many different countries that are taxed under a wide variety of laws and methods. International merchandising deals and other financial matters also present complex ownership issues.

One pressing issue in the Steely Dan case is the interweaving of Becker’s personal estate and that of the band. In such a case, a band that has a written and enforceable legacy plan can protect its own interests against those of individual members.

Any business can present complicated ownership issues. Disputes may arise over ownership of specific assets, the valuation of those assets, management rights, decision-making authority on day-to-day issues, or larger business strategies, and other complex issues.

These disputes grow even more complicated with businesses that do not necessarily produce a tangible asset. Technology companies, authors, painters, pharmaceutical researchers, and others often hold valuable but not easy to evaluate intellectual property.

An experienced probate litigator can help heirs resolve these and other complex issues. By exploring options for litigation, mediation, and negotiation, an attorney can help you find the solution that leads to the fairest outcome without incurring the unnecessary time, expense, and effort of litigation.

Experienced Estate Litigation Attorneys to Resolve Complex Legal Issues

International estate issues can be both complex and expensive. With the guidance of an experienced estate litigation attorney, loved ones can resolve their claims and move forward with life. Call (916) 313-3030 from Santa Clara or (213) 357-5200 from Los Angeles (or from anywhere in California), or write to us online to schedule your free consultation with one of the experienced trust litigation attorneys at Hackard Law. Our seasoned estate litigation attorneys serve clients from throughout California, and we know how to resolve estate claims fairly without incurring unnecessary time or expenses.