By: David M. Garten, Esq.
Part I: The Battle Over MGM Mogul Kirk Kerkorian’s $2 Billion Estate – Does A Personal Representative Have Standing To Challenge The Surviving Spouse’s Claim As An Omitted Spouse?
As a general rule, it is neither appropriate nor proper for a personal representative (“PR”) to take an affirmative position for or against any faction claiming a right to the estate of a deceased where all of the potential heirs of the estate are before the court. However, in California, an executor may participate in proceedings to determine a beneficiary’s entitlement to estate assets upon a showing of “good cause.” See Estate of Kirk Kerkorian, 19 Cal. App. 5th 709 (Cal. App. 2018). In Estate of Kirk Kerkorian, Kerkorian married Una Davis in 2014. Prior to their marriage, Davis signed a pre-nup relinquishing her rights to receive any money when he died. Kerkorian gave his designated executor under his will, Anthony Mandekic, $10 million with written instructions to provide the money to Davis in place of other monetary transfers. The relationship lasted just 57 days when Kerkorian kicked Davis out of his home.
After Kerkorian died in June 2015 at the age of 98, Davis filed a claim for a third of Kerkorian’s $2 Billion estate as an “omitted spouse”. Davis alleged that the $10 million agreement was void on the basis of lack of capacity, undue influence, and improper execution.
Mandekic sought court approval to oppose Davis’ petition. Mandekic asserted there was good cause to grant such approval because he was responsible for implementing what he knew to be the testamentary wishes of Kerkorian, unnamed charitable beneficiaries were the sole designated beneficiaries of the estate and there were no known charitable beneficiaries available to defend the estate, he had no remaining personal interest in the estate, and that even if he was directed to refrain from litigating the petition, he would still remain involved as a witness and executor. Davis opposed Mandekic’s request and alleged that his participation was unnecessary because the Attorney General was both obligated and able to represent the unidentified charitable beneficiaries of the estate and Mandekic was not able to show good cause to oppose the petition as a litigant because the Attorney General already had a statutory duty to represent the unidentified charities. The Attorney General did not oppose Mandekic.
The probate court granted Mandekic’s request to oppose Davis’ petition. The court reasoned that Cal. Probate Code §11704 does not prevent a personal representative from participating in proceedings to determine a beneficiary’s entitlement to estate assets. The only thing the Probate Code requires is a showing of good cause. The probate court found that such good cause existed because Mandekic was familiar with Kerkorian’s financial and personal affairs, putting him in a unique position to best advocate for Kerkorian’s intentions; he had no financial interest in the estate, having already received his distribution; he was not otherwise improperly motivated to participate in the proceedings; it would be a waste of resources to require Mandekic to educate the Attorney General; and allowing Mandekic to participate as a party would result in a speedier resolution.
Davis’ appealed the probate court’s decision, claiming that the determination of “good cause” was not enough and that the court should have decided whether Mandekic’s participation as a party was “necessary to assist the court.” Davis also contended that the good cause finding was an abuse of the court’s discretion.
The appellate court affirmed, holding that an express finding of necessity was unnecessary because a “good cause” finding under §11704 naturally incorporated a contemplated level of necessary assistance by the petitioning party and that the “good cause” determination was well within the court’s broad discretion.