Recent online articles have widely reported that Naomi Judd allegedly left nothing in her will to her two daughters, Wynonna and Ashley Judd, and appointed her husband of 33 years, Larry Strickland, as the executor of her estate. The internet appears to be up in arms questioning whatever could have caused Naomi to make this decision. But, did Naomi Judd actually disinherit her daughters from her estate by nominating her husband as the executor of her estate? The answer may very well be “no.”
Vanity Fair reports that Larry Strickland has “‘full authority and discretion’ over any property that is part of [Naomi’s] estate ‘without the approval of any court’ or permission from any beneficiary of the estate.” An executor (known as a personal representative in Massachusetts) is the fiduciary responsible for administering a decedent’s estate. In fact, it is common to include language in a will granting an executor broad fiduciary powers without license of court or notice to or consent of beneficiaries. This is intended to allow for a smooth and seamless estate administration process. This language certainly does not prohibit a beneficiary from bringing a claim against the executor (or the estate), nor does it mean that the executor can avoid upholding his fiduciary duties. Instead, it means that the executor does not need to check back in with the court (or beneficiaries) whenever a decision is made during estate administration.
Online resources and comment sections show a certain level of shock over Naomi purportedly nominating her brother-in-law, Reginald Strickland, and the president of Wiatr & Associates, Daniel Kris Wiatr, as co-executors if Larry Strickland is unable to serve as executor. How could Naomi do such a thing? Simple. There are many factors to consider when naming someone as the fiduciary of an estate. First, are they fiscally responsible, organized, capable and competent? Second, do they have the bandwidth to take on this responsibility? Once appointed, the fiduciary will need to gather information regarding the decedent’s assets and work with counsel to prepare any estate tax returns and fiduciary income tax returns, as applicable. An individual who travels frequently or is not readily accessible may not be the best person to nominate as executor. Further, after the loss of a loved one, serving as a fiduciary can feel like an emotional burden – a burden that some may not wish to impose upon others.
Does this mean Naomi’s fans should be concerned by the fact that she did not name her daughters as executors (or successor executors) of her estate? No. We do not know the circumstances that played into Naomi’s decision.
In addition, Naomi’s will purportedly provides that her husband is entitled to “’reasonable compensation’ for his services as executor” and reimbursement for “reasonable expenses, advances and disbursements, including attorney’s and accountant’s fees, made or incurred in the administration of [Naomi’s] estate.”
This too should not be cause for alarm. It is common for a will to allow for an executor to be compensated and even more common for an executor to take compensation where an estate is extensive and difficult to administer. Depending on the state, fiduciary compensation may be determined by statute or based on various factors including the type of assets involved, the amount of time spent and the difficulty of administration. What about reimbursement for reasonable expenses paid out of pocket? Again, it is standard language that a fiduciary should be reimbursed for expenses fronted. Otherwise, why would anyone serve as a fiduciary?
So, do these factors mean that Wynonna and Ashley have been disinherited by their mother? Again, not necessarily. Larry, as executor, is required to dispose of the assets in accordance with the terms of Naomi’s will. It is possible that her will directs that some of the assets are distributed to her daughters. Her will may also direct that assets pour over to a trust for the benefit of her daughters. In fact, another article states that Naomi’s will refers to the “Naomi Ellen Judd Living Trust.”
Alternatively, Naomi may have benefited her daughters through lifetime gifting or beneficiary designations separate from her will and trust (such as through life insurance or retirement accounts). Finally, perhaps Naomi did leave most of her assets to or for the benefit of her husband, Larry. There are estate tax reasons for leaving assets to or for the benefit of a surviving spouse. Assets that are left to a spouse either directly or by way of a qualified trust allow for a marital deduction meaning that estate tax is not imposed on those assets at death. We do not know the ultimate disposition of Naomi’s assets and can only surmise what she may or may not have decided.
Finally, despite Larry’s ability to take compensation and reimburse himself for expenses, he is still required to uphold his fiduciary duty and cannot drain Naomi’s purported $25 million estate for his own benefit as executor.
What is the takeaway from all of this? Reporting can sometimes sensationalize these stories without the fulsome understanding of complex estate planning strategies. In your own life, be sure to engage skillful legal counsel to ensure that your estate plan represents your intentions.