Toronto Estates and Trusts Monitor

A judge in the US recently decided a dispute over the rights to various comic book characters between Marvel (and its parent, the Walt Disney Company) and the heirs of the late Jack Kirby. 

Jack Kirby was a comic book artist and author who co-wrote some of Marvel’s most iconic comic book titles, including Spider-Man, the Incredible Hulk, the Fantastic Four, and X-Men.  Marvel owns the right to those characters and, along with Disney, has made a fortune off various movie franchises involving them. 

In the United States, copyright law provides that, in some circumstances, creators or their heirs can regain copyright they have sold to characters or stories after a given number of years.  In 2009, Kirby’s heirs sent termination notices to Marvel, Disney, and other studios, expressing their intention to regain copyright to various creations starting in 2014.  Marvel responded to the termination notices by starting a lawsuit claiming that it owned the works in question.

The case turned on the character of Kirby’s employment relationship with Marvel when the works were produced – specifically, was Kirby an independent freelancer or were the works made at the “instance and expense” of Marvel?   

Marvel argued that it employed Kirby when the works were created and, as a result, owned the works.  Kirby’s heirs argued that Kirby had acted on a freelance basis and that, accordingly, they were entitled to send the termination notices and gain ownership of the works. 

Last week, US District Judge Colleen McMahon ruled in Marvel’s favour.  She found that the issue was not whether Kirby had created the works and characters in question but rather whether his work qualified as “work for hire” under the US Copyright Act of 1909 and in this case she found that it did.  Kirby’s heirs have said they intend to appear the ruling.  

The fifteen-year saga started by Anna Nicole Smith against her late husband’s estate appears to have finally come to an end.  Smith (whose given name is Vickie Lynn Hogan) made headlines in the mid-1990s when the then-26 year old married 89-year-old J. Howard Marshall.

Marshall died just over a year after his marriage to Smith.  More than a decade prior, Marshall had established a trust, which had the effect that on his death his assets would pass directly to his son.  Smith brought a claim in Texas against Marshall’s estate alleging that after she married Marshall he had intended to set up a trust for her but that his son had interfered, the result being she received nothing from the estate.   

Along the way, Smith filed for bankruptcy in a California bankruptcy court.  Marshall’s son filed a claim against her in bankruptcy court alleging that she defamed him by having her lawyers make derogative statements about him in the press.  Smith counterclaimed and alleged tortious interference with the gift that Marshall had intended to leave her (essentially, the same claim she asserted in the probate proceeding in Texas).  The bankruptcy court sided with Smith, granting her summary judgment with respect to the claim Marshall’s son commenced and granting her judgment for about $425 million for her own claim. 

Since that time, the matter has bounced around the appeals courts with the parties arguing about whether the California bankruptcy court had the jurisdiction to adjudicate the claims or whether they were properly within the jurisdiction of the Texas probate court.  Smith died in 2007, but her estate continued to pursue her claim. 

Last week the United States Supreme Court settled the issue once and for all.  It found that while the California bankruptcy court had the authority to resolve Smith’s debts it did not have the Constitutional authority to decide the probate dispute.  A result of the decision is that Smith's estate is entitled to nothing from Marshall's estate. 

If any of you are woken up by a hippity-hop over the weekend – don’t worry. It’s probably just the Easter bunny coming to deliver chocolate.  The Easter bunny is frequently associated with Peter Rabbit, the literary creation of Beatrix Potter.

Potter was born in 1866 and benefited from the generosity of an estate early in her life – her parents had received inherited wealth from a cotton fortune. As a result, Potter lived and was educated in luxury at home in London, England. 

As a child Potter developed a love of nature that she carried through out her life...and she also developed a love of literature.  She wrote the Tale of Peter Rabbit in 1893 (it was initially written for the son of Potter’s former governess). After being rejected on a number of occasions the story was printed commercially by Frederick Warne & Co. in 1902 – and hasn’t gone out of print since.

The Tale of Peter Rabbit involved the story of a naughty little bunny who was at his best tearing up the garden of a certain Mr. McGregor.  He was joined from time to time by his fluffy sisters - Flopsy, Mopsy, and Cottontail (naturally, the girls were better behaved). 

Potter died in 1943 and left a legacy of much beloved children’s literature (not to mention charming Wedgwood china which is a “go to” when it comes to Christening gifts, but I digress..)

Incidentally, rabbits weren’t Potter’s only beloved animals - I have to say I’ve always loved Potter’s Jemima Puddle-Duck more than Peter Rabbit. However, I’ll leave well enough alone – who needs controversy over a long weekend!? 

A mysterious visitor's annual ritual of leaving cognac and roses at Edgar Allan Poe’s graveside appears to have come to an end after more than sixty years. 

Poe was born in Boston on January 19, 1809.  His early life was difficult – his father abandoned the family when Poe was young and his mother died a year later from consumption. 

Poe moved to New York in the early 1830s, which is when his publishing career took off.  He would become known for his macabre tales and poems.  While Poe enjoyed prominence, he had difficulty supporting himself as a writer and would frequently have to borrow money.  Over time, his behaviour started to become erratic and he developed a drinking problem (apparently fuelled by the sudden death of his wife).  Poe died in 1849, at the age of 40 under mysterious circumstances – his cause of death is still unknown and theories have included suicide, murder, alcoholism, and hypoglycemia.

Poe's funeral was a simple one and reportedly was attended by few.  He was interred at the Westminster Hall and Burying Ground, initially without a gravestone - although one was put in place in 1875.

The mysterious visits to Poe's grave apparently started in the 1940s (and were first referenced in print in the Evening Sun, a Baltimore paper, in 1949.)  The “Poe toaster”, as the visitor was called, was always dressed in black, and wore a white scarf and a wide-brimmed hat. The visits continued every year on the anniversary of Poe’s birth, with the visitor leaving a half-empty bottle of cognac and three roses on Poe’s gravestone.  

In 1993, the visitor started leaving notes and one left in 1998 indicated that original Poe toaster had died and the tradition had been passed to his two sons.  Apparently, the sons didn’t take the duty seriously and in 2009 the visits stopped. Why is unclear, although the fact that 2009 was the 200th anniversary of Poe’s birth might have had something to do with it.

It remains to be seen whether the Poe toaster will reappear.  In the meantime, various “faux Toasters” have taken up the mantle and have been trying to reenact the ritual themselves.  

Eighty-five years ago today, on December 24, 1925, a short story written by A.A. Milne (then an assistant editor at the humour magazine Punch) appeared in the London Evening News.  It was titled “The Wrong Sort of Bees” and told the tale of a boy named Christopher Robin and his bear, “Winnie-the-Pooh”.

The boy was based on Milne’s young son (also named “Christopher Robin”) and the bear of very little brain was based on Christopher’s teddy who, having been initially named “Edward Bear”, was later renamed “Winnie-the-Pooh” – a name derived from combining the names of a real bear and a fictional swan.  “Winnie” was the name of a bear in the London Zoo who had been the mascot for the Winnipeg regiment of the Canadian army while “Pooh” was the name of the pet swan in Milne’s book, “When We Were Very Young.”

In 1926, the book Winnie-the-Pooh was published, which featured Christopher Robin, Pooh, and his other animal friends (who were also based on Christopher’s stuffed animals).  Two more books would follow by Milne about Pooh and the gang before the rights to the characters were licensed in the United States.  Currently, Christopher’s stuffed versions of Pooh, Piglet, Kanga, Eeyore, and Tigger reside in the New York Public Library. 

Milne died in 1956 and was survived by his wife and Christopher.  In his will, he left his assets in trust to his widow for her lifetime and, upon her death, in trust for his descendants and a few charitable institutions. Unfortunately, it has not all been smooth sailing – for a good part of the past decade Christopher’s daughter, Clare, was involved in unsuccessful litigation with the American licensor of the works over entitlement to royalties.  

For those in New York City over the holidays, Christopher’s stuffed animals can be viewed at the Children’s Center in the Schwartzman Building at 5th Avenue and 42nd Street.

Have a very Merry Christmas!

Michael Jackson may have died, but his ability to make money certainly has lived on! Over the past year, the King of Pop’s estate has raked in more than $242 million. In fact, Jackson apparently made more than any living celebrity, with the exception of Oprah.   

The sources of income are numerous – the estate has made money from last year’s film, “This is It”, radio play and album sales, memorabilia, a Jackson-themed video game, and the re-release of Jackson’s autobiography. 

The cash flow doesn’t show any signs of slowing – there’s a deal with Sony to put out unreleased recordings by Jackson which is expected to bring in a grave-rattling $200-250 million over the next seven years.  Additionally, the estate still holds the music catalogue that Jackson purchased, which includes songs by, amongst others, the Beatles, Elvis Presley, and Bob Dylan. 

Jackson’s not the only celebrity making money in the afterlife.  Jackson topped Forbes’ recent list of the 13 top earning dead celebrities, but there were others who made a decent showing.  In at number 2 was Elvis Presley, whose estate brought in a cool $60 million. 

Charles Schulz, the creator of Charlie Brown and the rest of the Peanuts gang, placed 4th ($33 million) with Theodor Geisel (a.k.a Dr. Seuss) coming in 7th place ($11 million). An interesting addition to the list was Albert Einstein, whose estate landed in 8th place with $10 million – most of Einstein’s post-death earnings have come from tie-ins with his name or image.

Forbes’ also produced a list of the “also rans”, who didn’t make the top 13, but whose estates are still making money.  Making the list are Michael Crichton, James Dean, Bob Marley, Marilyn Monroe, Tupac Shakur, Frank Sinatra, and Andy Warhol.   

Happy Hallowe’en!

It was bound to happen. Really, it was only a matter of time.

A reality show about estate litigation is currently in the works. 

I happened upon this frightening piece of news while reading the Wealth Law Blog (which is published by an Oregon-based law firm).   

In mid-July, the production company responsible for “LA Ink” and “Storm Chasers” sent out a casting call for residents in the New York Tri-State area.  The production notice reads in part:

Are YOU and YOUR RELATIVES arguing over a loved one’s Will? Do you need help resolving family conflicts and evaluating the worth of objects in the Estate?

Was your loved one’s Will vague– who should get what -- and you and your relatives can’t agree, we want to hear from you!!!

Billing the show as a “life-changing new series”, the production company promises to settle the participants’ “estate nightmare” as well as to financially compensate them. 

The casting call doesn’t indicate exactly how they intend to resolve the estate disputes – will the program have a touchy-feely Oprah-esque sentiment to it, or will things be resolved Judge Judy-style?  

I’m curious to know what type of estate disputes will be featured.  A secret I’ll share with you is that a lot of estate litigation isn’t all that exciting – I doubt that disputes over trustee compensation or the appropriate interpretation of administrative clauses in wills would make for particularly fascinating viewing. 

So, would I tune into a show like that?  On the one hand, the idea is about as appealing for me as I imagine that sitting around watching COPS would be for your average police officer.  On the other hand, I can already feel the morbid curiosity getting the better of me.