We often see in the news that a deceased celebrity's estate is suing someone for use of the celebrity's copyrighted material or trademarked phrase.
Most recently, there was a ruling for Michael Jackson's estate that barred a website from advertising the sale of the late pop star's previously unreleased songs and photos, according to Courthouse News Service. Another case involved the late historian Howard Zinn and his interviews. In both cases, the estates of the deceased became entangled in a legal battle.
Why is it that estates often end up in court? Aren't they simply supposed to be divided among heirs?
It's not quite that simple.
A deceased person's estate is usually controlled by either an executor or a trustee. The difference between the two depends on how you structure your estate plan.
If you have a living trust, or create a trust with your will, then there will be a trustee who controls the estate's assets until they are distributed. If your trust is not set up to distribute all of your assets at once, the trustee must manage the assets until the trust is dissolved.
If you only have a will, there will be an executor who handles the administration of your assets. Like a trustee, the executor of a will has control over the assets until they are distributed.
The reason that estates get involved in litigation is because both trustees and executors have what is called a fiduciary duty. This duty means they must act in the best interest of the estate, which includes making sure an estate's assets remain with the estate and continue to increase in value before they are distributed.
So if an asset like a Michael Jackson song is owned by his estate, the trustee or executor may be required to sue for unpaid royalties, for example. Otherwise, the trustee would not be acting in the best interest of the estate.
If you are a trustee or executor, keep this in mind. If you are a beneficiary, you have the ability to potentially remove a trustee or executor if he fails to live up to his duties. In either case, consulting an experienced estate planning lawyer is probably a good idea.
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