Abuse of Discretion

Just weeks after a federal appeals court ruled Anna Nicole Smith’s estate was not entitled to any of her late husband’s fortune, Larry Birkhead went on a whirlwind publicity tour to announce personal items from the former Playmate’s estate would be sold at public auction last weekend in Las Vegas.  Birkhead appeared on the TODAY show, MSNBC and E! News with his young daughter Dannielynn, sole heir to Smith’s estate.  Throughout this tour, outlets reported a portion of profits from the auction will be given to two charities – PETA and the Anna Nicole and Daniel Wayne Smith Foundation.  In fact, the official auction booklet featured a letter written by Birkhead stating as much.

As Chuck Muth noted recently in Nevada News & Views – “Anna Nicole Smith Auction in Vegas Big Rip-Off?” – motives for hosting this auction are highly suspect.  In addition to the question of exactly who will receive profits from last weekend, there are two legal issues at play here: the fiduciary responsibility of Howard K. Stern – Smith’s former companion now accused of contributing to her death – as executor of the estate and the questionable decisions of Birkhead as guardian of the sole heir.  Stern and Birkhead’s legal right to sell off assets of the estate and divert funds away from Smith’s daughter by giving profits to charity is, at best, questionable.

Redirecting funds away from the sole heir clearly violates the deceased’s intent.  Smith’s will does not authorize charitable giving in any capacity.  It permits the executor to retain property, make investments, defer distributions, obtain advisors and make tax decisions for the sole purpose of building and benefiting the estate.  Smith’s clear intent was to bequeath ALL assets to her child.  When the court named Dannielynn the sole heir, the most logical and legally sound action was to essentially delete Smith’s deceased son Daniel’s name from the will and replace it with Dannielynn’s.  All other provisions should remain the same.

The only reasonable, legal explanation for these actions is if charitable contributions will significantly reduce estate taxes owed by the heir in the future.  In this case, the executor must act to benefit the overall health of the estate and its beneficiaries.  Extensive documentation should be provided to backup any such claim.  As the Anna Nicole and Daniel Wayne Smith Foundation does not hold tax exempt status with the IRS, Dannielynn is responsible for tax payments if the estate donates money – making the lone explanation moot.

Even if Birkhead, as Dannielynn’s guardian offers permission to Stern then diverting money rightfully owed to the sole heir is not in the best interest of the child.  As Birkhead tearfully expressed a need for money to ensure a safe childhood for his daughter in the national media, he simultaneously acts to diminish the financial health of the estate.  A Los Angeles Superior Court did grant permission for the auction itself.  Even by Stern’s own admission he only “asked the court permission to conduct the auction to boost the inheritance of Smith’s three-year-old daughter Dannielynn Hope” – not to divert funds to any charitable organization. Both Stern and Birkhead sit on the board of this alleged charity begging the question – do they stand to profit by diverting funds from the sole heir to the foundation?

The mere existence of the Anna Nicole and Daniel Wayne Smith Foundation is suspect and both Stern and Birkhead’s authority to permit the auction in the first place is questionable.  If liquidation of assets from the estate is allowed to continue then all profits should go into a trust to be paid out to the beneficiary as outlined in the will – one third paid at age 25, one half at age 30 and the remainder at age 35.  Charitable giving is, of course, commendable.  If the assets of Smith’s estate are to go to charity then it should be done when Dannielynn, the sole heir, is of age to make that decision and is free to select legitimate charities herself.

10 thoughts on “Abuse of Discretion

  1. Thanks so much for writing about this issue. Chuck Muth also. We who have been following all the various tentacles of the ANS saga have been talking about this and other estate issues. It is so obvious what those two have been and are doing. Poor DL, a selfish, emotionally immature pimp daddy and his cohort, the guy that helped hasten the death of her mother. How dare they sell her mother’s things before she is even old enough to go thru them? Can’t brickhead get a job and support his daughter? How many other 3 year olds have to support themselves, their daddy and their daddy’s inexplicable best buddy?

  2. Thank you for the information.

    I couldn’t get your link with the phrase “by Stern’s own admission” to work. I don’t know if it is just me or if anyone else is having the problem also.

    If you are correct about them not having properly informed the Judge, I hope someone informs the Judge and something is done about it.

    JMO

  3. This is something that I hope is caught and stopped. I in all my life have never seen two guys that are so ruthless and will not stop. I sure hope it all catches up with them.

  4. Sadly, this doesn’t surprise me. Larry Birkhead and Howard Stern have a long history of exploiting Dannielynn (and the memory of ANS herself, for that matter) for their own financial gain. It’s reprehensible, but certainly not shocking.

  5. Surely someone in the probate court is aware of their underlying intentions. Is there anything the public can do to force the probate court to address Stern regarding the pockets the proceeds from the auction will be lining?

  6. It is all about greed!! Pure and simple…because if there were no money
    involved….DL would be an orphan when
    her mother died….I doubt HS or Lb would
    have cared.

  7. How in the world can Larry Birkhead and Howard Stern keep one red cent of money from this auction when the estate owes hundreds of thousands to creditors? Surely, there is a way to stop them from profiting while leaving the people who were stiffed twisting in the wind?

  8. The court approved the sale and all of its conditions. As Anna said, you “know nothing about nothing.”

  9. Perhaps it would help to understand who the officer’s of the Anna Nicole and Daniel Wayne Smith Foundation are:

    Florida Non Profit Corporation
    ANNA NICOLE AND DANIEL WAYNE SMITH CHARITABLE FOUNDATION, INC.
    Filing Information
    Document Number N08000001078
    FEI Number NONE
    Date Filed 02/01/2008
    State FL
    Status ACTIVE
    Principal Address
    C/O M. KRISTA BARTH, ESQ
    200 VILLAGE SQUARE CROSSING, STE 102
    PALM BEACH GARDENS FL 33410
    Mailing Address
    C/O M. KRISTA BARTH, ESQ
    200 VILLAGE SQUARE CROSSING, STE 102
    PALM BEACH GARDENS FL 33410
    Registered Agent Name & Address
    SAUERBERG, ERIC M ESQ.
    200 VILLAGE SQUARE CROSSING, STE 102
    PALM BEACH GARDENS FL 33410
    Officer/Director Detail
    Name & Address
    Title D
    STERN, HOWARD K
    200 VILLAGE SQUARE CROSSING, SUITE 102
    PALM BEACH GARDENS FL 33410
    Title D
    BIRKHEAD, LARRY E
    4000 HOLLYWOOD BLVD, STE 350 NORTH TOWER
    HOLLYWOOD FL 33021
    Title D
    MARTINO, RAYMOND
    200 VILLAGE SQUARE CROSSING, STE 102
    PALM BEACH GARDENS FL 33410

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