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Saturday, January 09, 2010

Ind. Courts - "Shopping mall tycoon Melvin Simon's daughter sues widow over will"

John Russell has a thorough story today in the Indianapolis Star, complete with a copy of the 16-page complaint filed in Hamilton Superior Court. Some quotes from the long story:

Less than four months after shopping mall tycoon Melvin Simon died, his family is fighting over the billionaire's vast fortune.

One of Simon's daughters, Deborah J. Simon, is accusing her father's second wife, Bren, of coercing her ill husband into signing a new estate plan a few months before his death, while he was gravely ill and dependent on her for care.

The new plan increased Bren Simon's share of the estate by hundreds of millions of dollars, according to a complaint filed Thursday by Deborah Simon in Hamilton Superior Court. The change essentially eliminated all charitable donations and dramatically reduced the inheritances of Deborah and her two siblings, the complaint claims.

"In fact, Melvin was so ill that he was unable to sign either his new will or trust agreement himself, necessitating someone to hold a pen in Melvin's hand and move his hand as he allegedly 'signed' both documents," the complaint says. * * *

Last March, Forbes magazine estimated Melvin Simon's net worth at $1.3 billion, but that amount is likely to have climbed in recent months. Much of Simon's wealth was tied to the company, which has seen its shares soar more than 200 percent from March 2009 lows. * * *

The Simon case could have repercussions for charities that stood to reap millions from the estate. During his lifetime, Melvin Simon donated more than $150 million to charitable causes, including Indiana University and the Indianapolis Museum of Art. Yet under the new estate plan, his charitable giving could be stopped until 66-year-old Bren Simon dies -- which, according to actuarial tables, is not expected for about 20 years, the complaint says. * * *

The earlier estate plan called for Melvin Simon's assets to be divided into three equal portions: one-third for Bren; one-third for a trust with Bren as the sole income beneficiary, with the remainder to pass to Melvin's children upon her death; and one-third to a series of trusts that would donate tens of millions of dollars each year to various charities, with Melvin's children receiving the remainder, if any, after a predetermined period. * * *

The new estate plan radically changed that, the complaint says. It calls for Bren to receive one-half of the fortune outright, while the other half is to be placed in a trust with Bren as the sole income beneficiary. * * *

Melvin's "cognition, memory and understanding" were impaired, and he was unable to hold the pen and sign his name, according to the complaint. Bruce Jacobson, an accountant and financial planner for Melvin and Bren, held and moved Melvin's hand as he signed the new plan, the complaint says.

Greg Andrews has this story in the IBJ. Some quotes:
The court filings charge Bren manipulated her husband for her own financial benefit and that her “unlawful” actions were facilitated by a team of professionals. Those included Krieg DeVault partner Eric Manterfield, who represented Bren as executor of the estate, and Bruce Jacobson, an accountant who was a longtime financial adviser to Melvin and Bren. Manterfield declined to comment. Jacobson and a Baltimore attorney representing Bren did not immediately respond to messages Friday afternoon.

According to the filings, prior to last February’s changes, Melvin’s estate plan divided assets into these three equal portions:

— One-third going directly to Bren.

— One-third placed in a trust, with Bren receiving all its income during her lifetime. After her death, the principal would pass to Melvin’s four children.

— One-third going to charitable trusts that were to donate tens of millions of dollars a year to local and national charities. Anything remaining after a predetermined period would go to Melvin’s children.

Under the new estate plan, Bren would receive one-half of the estate outright, and the other half would go into a trust, with Bren receiving all its income during her lifetime. Court papers say changes to Melvin’s estate plan created inconsistencies and conflicts that make it unclear what would happen to the principal after her death.

But court papers say that even if the principal ultimately goes to charities, that likely won’t happen for a long time—a delay that seems in conflict with the wishes of a man who gave away more than $150 million during his lifetime. The filing notes that actuarial tables indicate Bren, now 66, is likely to live another 20 years.

Trusts filed with the court show that prior to the changes to Melvin’s estate plan, local charitable, religious and educational organizations had been in for a windfall. One filing shows Simon earmarked $10 million for the Jewish Federation of Greater Indianapolis, $2 million for Congregation Beth-El Zedeck, $2 million for the Indiana University Foundation and $1 million each for Butler University, the United Way of Central Indiana and The Children’s Museum of Indianapolis.

Court papers charge the changes occurred in whirlwind fashion that would have been inappropriate even if Melvin hadn’t been ill.

In early February, court papers say, Baltimore attorney Marianne Schmitt Hellauer, who is representing Bren as executor, held an initial meeting with Melvin at his Indiana home. The filing says that at the gathering Hellauer patched in Manterfield by speaker phone and told him how Melvin’s estate plan was to be changed.

Court papers say Manterfield apparently did not talk with Melvin about the changes during that call. And, in the week between that meeting and the execution of the documents Feb. 13, Manterfield did not provide Melvin any materials explaining or summarizing the changes, Deborah alleges in her complaint.

At the Feb. 13 meeting, her attorneys charge, “Melvin was unable to hold the pen and sign his name, and Jacobson held and moved Melvin’s hand as Melvin allegedly signed the altered will and trust.”

The complaint says the Simon children were told about the new will at a meeting Oct. 13, nearly a month after Melvin died. The filings say no parties involved in the revisions made a video or audio recording of the process.

Indianapolis law firm Ice Miller is representing Deborah Simon. An attorney for the firm declined to comment.

Posted by Marcia Oddi on January 9, 2010 11:25 AM
Posted to Indiana Courts