A wrongful death lawsuit in 1997 found O.J. Simpson liable for the deaths of ex-wife Nicole Brown-Simpson and her friend Ron Goldman. Yet, their families have received little of the $33.5 million judgment levied by a California civil jury. According to an article from The Washington Post, “If O.J. Simpson’s assets go to court, Goldman, Brown families could be first in line,” we may find out soon whether or not Simpson had done any estate planning.
If Simpson had only a will, the estate would go through the probate process in court. Probate laws vary from state to state, but generally, the estate is filed in the person’s state of residence. Simpson resided in Nevada but might have owned assets in California or Florida, where he resided at different times. If that’s the case, separate probate cases will also be opened in those states.
The Nevada probate rule requires an estate to go through probate if its assets exceed $20,000 or the decedent owns any real estate. Probate must take place within 30 days, so things may happen quickly.
If no documents are filed, creditors can file claims to recover assets. The Goldman and Brown families may not be alone in filing for assets, but they’ll undoubtedly have a higher visibility than a credit card company or bank.
In California, the law holds that creditors with a judgment are considered to have “secured debt” and take priority over other creditors. In one instance, a family was awarded $9 million by a jury, but the debtor subjected them to a prolonged series of appeals and delays. When the debtor died, the estate paid the $9 million plus accrued interest of $3 million.
Did Simpson leave an estate big enough to cover his debts? At the time of the civil lawsuit, the court seized many of Simpson’s possessions. He was forced to auction his Heisman Trophy, which brought $230,000. He claimed to only have income from pensions, one from the NFL and the other a private pension.
Whether Simpson had a structured estate plan with trusts could affect how his creditors will be compensated. The creation and funding of the trusts will also affect their accessibility. Irrevocable trusts are robust legal entities but may not always be 100% impenetrable.
A transfer of assets made to avoid paying creditors is considered fraud, so any trust could be deemed invalid. If this occurs, the Goldman and Brown families may file separate lawsuits to attach assets in the trust.
You don’t have to be famous to have creditors trying to get assets from your estate. Seeking advice from an estate planning attorney about structuring your estate to shield inheritances from creditors is always advisable.
