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.