The late, great James Brown, known as “The Godfather of Soul” and “The Hardest Working Man in Show Business,” overcame an impoverished youth to win international acclaim. Sadly, despite having an estate plan in place, family squabbles have endangered the philanthropic legacy he sought to leave.
Brown’s 2000 estate plan was relatively simple: It provided for his personal effects to be distributed to his six adult children; for $2 million to establish a fund for the educational needs of his grandchildren; and the rest of his assets to fund the “I Feel Good” Trust to fund scholarships for financially needy and deserving students at schools in South Carolina and Georgia.
Eleven years after his death, his dream of using his fortune to fund scholarships appears to be in ruins, with millions spent in legal and fiduciary fees— not a single penny so far used for the educational purposes that Brown intended.
Unmarried when he signed the documents, Brown included a provision that he was intentionally not providing for any past, current or future wives or for any children other than the six named children. Brown's will also had a no-contest (or in terrorem) clause, which states that any beneficiary who challenges the terms of the will or trust in court would be disinherited. This common inclusion is meant as a “rattlesnake” to scare off potential challengers, but it’s a bit of a paper tiger, as a successful challenge would likely override it. Brown subsequently participated in a marriage ceremony to Hynie, who had signed a prenuptial agreement foregoing any rights to his estate. But, 10 months later, she gave birth to James Jr. and then three years into the marriage, Brown sought an annulment, claiming Hynie was already married. In one consent, Hynie waived any claim of a common law marriage.
Brown accurately predicted that his estate would be a mess. Since his death in 2006, the legal squabbles over his estate have involved over 90 lawyers and several lawsuits consisting of more than 4,000 pages. It’s the subject of best-selling author James McBride’s recent book, Kill ‘Em and Leave: Searching for Brown Brown and the American Soul.
Despite her prior waivers of her rights, Hynie contested the will and trust. She and five of his six children claimed the estate plan was invalid because Brown signed the documents as a result of undue influence.
The South Carolina Attorney General intervened and negotiated a 2008 settlement agreement with Hynie, on behalf of herself, James Jr. and the six adult children and their children. The agreement acknowledged James Jr. as an heir. The compromise created a new trust called the “Settlement Entity.” Hynie and the children and grandchildren waived any intellectual property rights they may have had under federal law on behalf of themselves and their heirs, instead agreeing to surrender these rights to the Settlement Entity. In exchange, Hynie was granted 23.7 percent of the Settlement Entity, which included her son’s share, and the six children were each granted 4.79 percent of the Settlement Entity, with the remaining 47.5 percent to fund a new charitable trust.
Although not in accordance with Brown’s wishes, this compromise assured that at least some of his wealth would be used for charitable purposes. Without this agreement, there was a risk that if the challenge was successful, the I Feel Good Trust would receive nothing. Even if the trust overcame that hurdle, if Hynie were found to be his surviving spouse, she might be able to claim an elective share of one-third of the probate estate. Finally, if the heirs exercise their rights to terminate the copyrights, it would have an adverse impact on the revenue stream supporting the I Feel Good Trust.
In a 2013 decision, the South Carolina Supreme Court ruled that the agreement was invalid on the grounds that it didn’t meet the statutory requirements of being just and reasonable. In regard to the claim of undue influence, the majority opinion stated that:
Brown had a reputation as a strong-willed individual who did not take orders from others, and he made his desires abundantly clear during his lifetime. We find there is no reasonable basis for the undue influence claim asserted here other than as a means to dismantle Brown’s estate plan. The result is to enable those who were disinherited to obtain Brown’s assets to the detriment of the charitable entity that Brown so fervently desired.
The opinion noted that the Attorney General’s “primary job is the enforcement of charitable trusts, and in this case, the compromise dismantles the existing charitable trusts, to great ill effect on James Brown’s estate plan.”
This piece is adapted from the author’s original article in Trusts & Estates’ 2017 Charitable Giving supplement.