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Settlement Nixed in Estate of James Brown

(CN) - A settlement of the estate of James Brown failed to honor the late Godfather of Soul's final wishes, the South Carolina Supreme Court ruled.

Brown, honored as the Hardest Working Man in Show Business, died in Atlanta, Ga., on Dec. 25, 2006, leaving behind an estate estimated to be worth anywhere from $5 million to $100 million.

In a will dated Aug. 1, 2000, the South Carolina native said he wished for all of his personal and household effects to be divided between his six children, and that the remainder of his estate was to left to The James Brown 2000 Irrevocable Trust via a pour-over provision in his will.

Brown created the 2000 Irrevocable Trust under a separate agreement, also dated Aug. 1, 2000, as part of his estate plan to provide financial assistance for the education of his grandchildren and disadvantaged youths.

The agreement creating the 2000 Irrevocable Trust includes Schedule A, which indicates Brown funded the trust with placement of his longtime residence at Beech Island, Aiken County, and other assets. The court noted, however, that the record contains some discrepancies as to the timing of the transfers.

Among those who contested the will were Brown's six adult children and Tommie Rae Hynie, whom Brown married on Dec. 14, 2001, only to learn she was still married to another man. Brown moved for an annulment and Hynie sued for divorce, though both parties dismissed their respective suits in a consent order filed in August 2004.

Challenging the will on grounds of undue influence, the parties fought to have Brown's estate pass by the laws of intestate succession. Tommie Rae claimed that she was entitled to an elective share or an omitted spouse's share of Brown's estate and that her son, James B., was entitled to a share of the estate as an omitted child.

The probate court transferred these claims and all filings thereafter to the circuit court.

South Carolina's attorney general at the time, Henry McMaster, intervened on the ground that the claims involved a charitable trust. After overseeing protracted negotiations, the parties entered into a compromise agreement.

The settling parties named in the agreement were Tommie Rae, the children and grandchildren of Brown, and McMaster. Afterward, the trustees of the original James Brown 2000 Irrevocable Trust contended that they were excluded from the agreement and never notified of it. Over their objections, a circuit court approved the settlement on May 26, 2009.

Under the terms of the agreement brokered by McMaster, the settlement parties would jointly seek the removal the trustees of the 2000 Irrevocable Trust as personal representatives of Brown's estate. All challenges to the will were to be dismissed, and the settling parties agreed that such contests were brought in good faith and with probable cause. Tommie Rae was recognized as the surviving spouse of Brown, and all children and grandchildren who were parties to the agreement were acknowledged to be Brown's legitimate issue and heirs without the need for DNA testing to verify their status.

The settling parties agreed to create a new trust called the James Brown Legacy Trust, which would "receive, hold, manage and be authorized to sell the James Brown Assets." Attorney General McMaster would alone select the trustee and any successor trustee for the Settlement Entity. He also created a new Charitable Trust, similar to the existing Charitable Trust formed from the 2000 Irrevocable Trust, with the advice and counsel of the parties. The attorney general was to have the sole authority to select the managing trustee as well as any successor trustee.

In the end, 47.5 percent of Brown's estate went to the new charitable trust, 23.75 percent went to Tommie Rae Hynie and her son, and 4.79 percent went to each Brown's adult children.

A new trustee was then named for the estate and the ousted trustees were removed from those positions. They then appealed the settlement and related orders to the South Carolina Court of Appeals, and the case was subsequently being transferred to the Supreme Court.

After review, the Supreme Court found that McMaster did nothing wrong in intervening in the case as he had a responsibility to protect the public interest of a charitable trust.

The justices concluded, however, that McMaster had "no authority to become completely entrenched" in an action that began here as one to set aside a will and for statutory shares, direct the settlement negotiations, and then fashion a settlement that discards Brown's will and his 2000 Irrevocable Trust and replaces them with new trusts, only to give himself sole authority to select the managing trustee.

"By so doing, the AG has effectively obtained control over the bulk of Brown's assets and has given his office unprecedented authority to oversee the affairs of the parties that has not heretofor been recognized in our jurisprudence," Justice Donald Beatty wrote for the court.

Brown's adult children also failed to show that their father suffered from the "undue influence" of others at the time he wrote his will. There was no evidence Brown was mentally infirm at the time he drafted his intentions, according to the ruling.

Rather, Brown "had a reputation for being a strong-willed individual" who did not follow others' orders, Beatty wrote.

The justices said Brown had been unequivocal about his desires for years.

"It appears Brown painstakingly developed his estate plan over the course of several years, and in various drafts, including the will in dispute here," Beatty wrote. "Brown made it clear that he intended the bulk of his estate to be used for the education of disadvantaged youths, as he had provided for his family members during his lifetime."

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