The Tom Petty Estate: When best laid plans are not specific enough.

In Business Tips, Estate & Probateby Larry DonahueLeave a Comment

Tom Petty died of an accidental overdose on October 2, 2017.  While his death was shocking and sudden, the artist had taken the time prior to the tragedy to participate in some estate planning.  Per his wishes, his wife of 16 years, Dana York Petty, became the “directing trustee” of the Tom Petty Estate.   His daughters Annakim Violette and Adria Petty from a previous marriage were named “trustees” as well.  Per the terms in the trust agreement, all trustees are guaranteed “equal participation” in the decision-making process.  Tom Petty’s daughters feel that “equal participation” means that the pair, if of the same mindset on issues regarding their father’s estate, would be able to cast majority votes (2/3), thus out voting their step mother on important issues.   The pair have recently filed a $5 million-dollar lawsuit against Petty’s widow claiming she has committed “self-dealing, theft and gross mismanagement of assets” since Dana York Petty has made decisions regarding the estate without the duo’s approval.

Dana York Petty, as the “directing trustee” feels she is well within her rights to make decisions for the betterment of the Tom Petty legacy.   This mindset has ultimately led her to establish an independent company; Petty Limited, LLC.  Tom Petty’s daughters feel this new LLC has been a way for Dana York Petty to reroute assets from the Tom Petty Estate, effectively by passing the pair.  It seems Dana and her step daughters have had a tough time the last 2 years agreeing on issues such as release dates and content for compilations and merchandising. 

It is very important to read and understand the will or trust so that you will know who the beneficiaries are, what they are to receive and when, and who, if any, your co-fiduciaries are. Does the will give everything outright, or does it create new trusts that may continue for several years? Does a trust mandate certain distributions (“All income earned each year is to be paid to my wife, Nancy”) or does it leave this to the trustee’s discretion (“My trustee shall distribute such income as she believes is necessary for the education and support of my son, Alan, until he reaches age 25”)? The document often imparts important directions to the fiduciary, such as which assets should be used to pay taxes and expenses. The document will usually list the fiduciary’s powers in some detail.

Guidelines for Individual Executors & Trustees, Understanding the Will [americanbar.org]

Tom Petty’s attorney has called the lawsuit a perfect example of why Tom Petty designated his wife to have the authority to manage the estate.  He contends that Mr. Petty was aware his wife was better suited to manage the affairs of the estate, which is why he named her “Directing Trustee” in his Estate documents.  The attorney contends that Dana will “not allow destructive nonsense to distract her from protecting her husband’s legacy” 

In the meantime, Dana York Petty has filed a petition asking that a manager be appointed to the Estate since she feels interference from Tom Petty’s daughters is keeping her from effectively managing his legacy as ordered.  She also is asking for consensus among the three of them to be required, so the daughters are not able to out vote her on important decisions.

Who broke Tom’s heart?

All parties insist that at the heart of the matter is protecting Tom Petty’s artistic integrity.   The decisions that are the most contentious are those that are centered around the future release dates of previously unreleased work, as well as the relationship between the Tom Petty Estate and the Heartbreakers, Tom Petty’s former band.  

Despite all the effort that went into the construction of the Estate to be inclusive of Tom Petty’s children and spouse, trouble has continued to bubble and boil.   The ambiguity around Dana York Petty being given the title of “directing trustee” and the estate specifically asking for “equal participation” among the three needed more definition around it.  Was Tom Petty’s intent that every trustee had an equal vote?  Or was his intention that everyone’s input was to be heard and considered, but Dana, as “Directing Trustee” would make the final decisions.   Tom Petty’s lawyer states it was the later, but since Tom Petty is no longer with us, the different sides will continue to argue.  

As the Tom Petty Estate demonstrates, the biggest challenge when it comes to estate planning is to make sure intentions are clear.  Any ambiguity in language or conflicting language can leave issues unresolvable and ripe for argument.   Tom Petty’s original intent will likely never be fully known.  Instead it will be decided by a judge or negotiated through mediation.  

Are you party to an Estate that is not being executed per the its specified terms?  Is the language vague and its intentions questionable?  Contact us or give us a call at 505.848.8581.  We help guide you through the Estate and Probate process. 

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