Tom Petty's Estate: Free Fallin' Into Disaster
I'm sorry for the pun, but - unfortunately - it's just too easy. The world experienced a huge loss when Tom Petty died in October 2017 to an accidental overdose. We are all familiar with his clever and relatable lyrics and unique voice, particularly on a relaxed summer day. As a follower of this blog might expect, however, his music isn't the focus after his death; now, his $90 million estate is creating some major problems in his family. Just review the court record in LA that reflects distrust, deceit, confusion, and greed.
When he died, Tom was married to Dana York, his second wife, and he had two daughters from his first marriage. Tom had a living trust that outlined how his estate should be divided between his wife and daughters. Ultimately, it looks a lot like 1/3 to each, but he gave some interesting direction in his trust that did not outline, with much specificity, how the three of them are to manage his empire after his death. Tom put his wife in charge of things as "trustee" but directed that all of his copyrights and music interests were to be distributed to an LLC where the three ladies Petty would "participate equally" in the management of that LLC.
I mean . . . that's, like, calling for a fight. Does that mean they have to agree on everything unaimously? Or, that 2/3 agreement? How do they resolve a deadlock? Presumably, this could be for decisions as small as "where to open the bank account for the LLC?" to "what songs should be put on a tribute album?" In other words, a mess. This is such a big part of what we try to avoid in the estate planning context. Confusion. Ambiguity. That's why people get frustrated with lawyers - we are always looking to make things as clear as possible, which means a lot of Type-A-ness. But it also means clarity for the people you leave behind.
Not only does Tom Petty's estate deal with some serious money, which can create incredibly tension amongst family members (especially blended family members), but this deals with significant emotions and the world's connection to Tom Petty's music. It's big stuff and why musicians typically have the most complicated estates . . . How do you preserve a legacy for someone who added so much to the world?
By saying his wife and daughters would "participate equally" in the management, Tom Petty didn't consider the probability that these three women would not get along and would have very different ideas about how to preserve his legacy. It's too bad because the only people winning at this point are the lawyers. That should never be the end-goal of an estate plan. It sounds like all of the ladies "won't back down". OK, I'm done with Tom Petty puns.
Moral of the story: a plan is good but you can't just sign documents. You have to be mindful. Particularly when you have a legacy you'd like to leave intact.
I hope this resolves sooner rather than later for the sake of the family and those of us who would like to continue seeing Tom Petty's legacy live on through the years.