Author Tom Clancy amassed an $86 million fortune by spinning language into tales of conflict and intrigue, such as The Hunt for Red October. It is perhaps ironic, then, that after his death, his estate, was surrounded by drama caused by language—in this case, the second codicil (amendment) to Clancy’s will.
Clancy’s will was executed in 2007. It divided Clancy’s wealth equally into three separate trusts. The first was for his wife; the second was for his wife’s use during her life, with any remaining assets passing to his daughter with that wife upon his wife’s death. The third trust was to be shared among Clancy’s four grown children from a previous marriage.
Years after Clancy executed the original will, and just weeks before his death, Clancy added a codicil with this language, the source of the dispute: “No asset or proceeds of any assets shall be included in the Marital Share of the Non-Exempt Family Residuary Trust as to which a marital deduction would not be allowed if included.”
The Battle Over Tom Clancy’s Estate
If you had to read that last sentence two or three times, and are still unsure of its meaning, you’re in excellent company. The seven justices of Maryland’s highest court, the Maryland Court of Appeals, also struggled to agree on the meaning of that language. In the end, they were divided 4-3, ruling (barely) in favor of Clancy’s wife.
Here is the source of the confusion: The four justices who prevailed interpreted the italicized language above as meaning that all estate taxes for Clancy’s estate would necessarily be paid only from the adult children’s trust, and not from either trust for the benefit of Clancy’s widow. That outcome was the only option for protecting the marital deduction from estate tax under federal law.
That may seem unfair to you, and again, you’re in good company. The other three justices on the court took the side of Clancy’s adult children. While they agreed that the language in the codicil was intended to protect the marital deduction, they also believed the codicil language was not meant to conflict with a separate clause in Clancy’s will. That provision said that the estate tax was to be paid equally from two of the trusts, not only from the Clancy children’s trust.
The justices in the minority believed that the adult children should be saddled with only half, not all, of the estate’s tax bill. They interpreted the codicil language as Tom Clancy’s wish to protect his wife’s marital deduction, but not to increase it at his adult children’s expense.
Strikingly, the attorney who wrote the codicil and was initially executor of the estate agreed with the children. This is strong evidence that the position of the adult children and the minority judges was the result Tom Clancy intended. Unfortunately for the adult children, what the document says (as interpreted by a court, if necessary) controls—not what the testator intended.
The Cost of Unclear Estate Planning Language
What was the outcome in dollars and cents? Clancy’s adult children were stuck with a federal estate tax bill of nearly $12 million. Had the Maryland Court of Appeals decided in their favor, the total estate tax bill would have been approximately $16 million. However, half of that would have been paid by one of the widow’s trusts. Instead of paying $8 million in taxes, then, the adult children paid $12 million. Instead of paying $8 million in taxes, Clancy’s widow paid nothing. The Internal Revenue Service lost out, too—to the tune of about $4 million.
At this point, you may not feel too bad for any of Tom Clancy’s heirs. After all, even the children who footed the tax bill will still walk away with millions of dollars apiece. But even though their estate battle was on a grander scale, there are still lessons to be learned by those of us of more modest means.
Lessons for All Families from Tom Clancy’s Estate
One lesson is this: It does not matter what you mean for your estate planning documents to say; it only matters what they actually say. If any of the language in your estate planning documents can be interpreted in different ways, fix it now so that it says, unequivocally, what you mean it to say.
Another lesson: Even if a court is called in to interpret your estate plan, and the court gets it right, there are still costs. Of course there is the expense of the litigation itself, which comes out of the money you wanted your heirs to have. Then there’s the time lost—two years spent in court, in the case of the Clancy family. And last but not least, the cost to relationships. After months or years spent fighting over your estate, relationships between your family members could be irreparably damaged.
Long, costly court battles often result from poorly-written estate planning documents. Don’t learn this lesson—or let your heirs learn it—the hard way.
Experienced Estate Planning Attorneys Help Prevent Disputes
What’s the best way to makes sure your wishes are honored and that your heirs don’t fight over them as Tom Clancy’s did? First and foremost, retain an experienced estate planning attorney, preferably one who concentrates a majority of their practice in estate planning. Experienced estate planning attorneys who spend most of their time drafting wills and trusts are acutely aware of the dangers of confusing language, and much less likely to use it. While an attorney’s experience is no guarantee that errors won’t occur, using a knowledgeable estate planning attorney reduces your risk.
Just because your attorney is skilled doesn’t mean you should relax, though. You must read your estate planning documents with care, making sure you understand everything before you sign. If you have questions, ask; these documents are for your family’s security, and there’s no such thing as a silly question. If something is confusing to you, it might be confusing to others, so get as much clarity as possible. Just as with doctors, it’s perfectly acceptable to get a second opinion from another professional if you want one.
Seek the recommendation of people you trust when looking for an estate planning attorney, and retain the best one you can find. You owe it to yourself and your family.
BRMM attorneys take pride in putting together estate plans that are clearly written to honor our clients’ wishes and avoid confusion. In addition to drafting your estate plan, we remain available to you in years to come, helping you update it as needed. Contact our Troy, Michigan law office today at (248) 641-7070 for a free, confidential consultation, and get started today on taking action for tomorrow. To read more about famous people who have gotten estate planning disastrously wrong, or brilliantly right, check out Trial & Heirs.