Posted 2/27/2006

It is a classic American tale: Boy meets stripper, boy marries stripper, stripper goes to court to get the dead boy’s estate. Of course, in this case, the “boy” was 90-year-old oil magnate Howard Marshall and the stripper is the buxom reality-TV star Anna Nicole Smith. The court is none other than the U.S. Supreme Court, where Anna’s appearance Tuesday will draw more coverage than it would if Chief Justice John Marshall returned from the dead for the argument.
In the case of Marshall v. Marshall (Smith’s legal name is Vickie Lynn Marshall), the characters are more interesting than are the issues.

This case, however, might have far-reaching consequences for both state and federal courts. The court will decide whether federal courts should defer to state probate courts in matters of disputed wills. Indeed, Smith might achieve a small type of legal immortality — becoming for probate law what Miranda was to criminal law and Brown was to constitutional law. Of course, before she becomes the pin-up girl for probate lawyers, the court must sift through a case that would have been rejected by Hollywood scriptwriters as a bad Dallas re-run.

An unusual path

Smith’s transformation from stripper to law giver is quite a turnaround by any measure. It began when Howard Marshall’s chauffeur drove him to Rick’s Cabaret, a strip club in Houston, and he saw Smith, a popular 23-year-old topless dancer and a Playboy model. Marshall was an 86-year-old in a wheelchair with a penchant for strippers. (His mistress for 22 years was another Houston stripper, Jewel DiAnne “Lady” Walker, who had died two months earlier from complications from liposuction surgery.)

While Smith described him as a “frisky man,” Marshall lived only 14 months after their marriage. When he died, things got ugly with Marshall’s son and heir, Pierce, who revealed that, shortly before his death, Marshall had changed his earlier will to make it irrevocable — a will that did not mention Smith.

These types of disputes are usually resolved in state probate courts. Yet the Texas court was never a promising venue for Smith, who had only a claim of an oral promise from Marshall. (Smith would prove a disastrous witness, appearing in a pink top emblazoned with the word “Spoiled” and admitting that she can’t understand most multi-syllabic words).

Sensing a dry hole in Texas state court, Smith’s attorneys went to federal bankruptcy court, claiming the assets of the estate as part of her potential worth. This time, it was Pierce who cratered before the court. The federal judge found that Pierce had destroyed evidence (related to the trust for Smith) and engaged in misconduct showing “willfulness, maliciousness and fraud.” He awarded Smith $450 million, later lowered to $89 million and then reversed by a federal appellate court in deference to the Texas probate court.

Now, the question is whether the court will issue a decision against the federal courts. Ironically, by wrapping herself in the jurisdiction of the federal courts, Smith has a new patron: Uncle Sam. The U.S. solicitor general will appear in defense of her bankruptcy judgment.

Even without this money, Smith has earned millions from the proceeds of her reality show and other ventures — not bad for a woman who began as a night cook at Jim’s Krispy Fried Chicken in Mexia, Texas. Indeed, in a recent poll by Forbes.com, Smith was ranked as 5th out of the 10 most financially savvy. Though it is true that she lost to Warren Buffett, Alan Greenspan and economist (also 1976 Noble Laureate) Milton Friedman, she did manage to beat Bill Gates and Donald Trump.

A lesson

For any stripper-turned-millionaire wannabes, the case is a cautionary tale that one should research carefully before abandoning the dance pole. There are 41 “common law property” states where surviving spouses have two options when facing a contested estate. In virtually all common-law states, the spouse can either accept what was given under the will or take an “elective share,” or “force share,” usually one-third of the estate. So, if your sugar daddy left you struggling on $100 million of a $1.6 billion estate in his will, you can “elect against the will” and take a statutory share of roughly $533 million.

If you are in a community-property state (such as Texas), property acquired during the marriage is owned equally. While Smith claimed $800 million under community-property rule (not including $6 million in gifts), much of Marshall’s estate was not only gained before their marriage but most of it (except roughly $100 million) also was put into independent trusts before his death and is not legally part of the estate.

Of course, for probate lawyers, this will be forever known as the lap dance that changed the law. Trust me, for probate law that is about as exciting as it can get.