130: Exploring the OJ Simpson Estate: Probate and Creditor Claims

You know of the infamous murder trial involving OJ Simpson and the Goldman and Brown families that took place in the 90s. And in case you happened to miss the news, Simpson passed away recently, stirring up the family conflicts all over again. Here at Absolute Trust Talk, we have an affinity for celebrity estate drama, mainly because of the important estate planning lessons we can take away. While the exact details of OJ’s estate structure remain unknown, the estate will probably undergo probate due to the presence of creditors. Listen in as we cover all the details, we know so far and share some essential estate planning wisdom with you along the way.

Time-stamped Show Notes:

0:00 Introduction

1:23 Here’s what we know about the executor handling OJ Simpson’s estate, and the public statement made.

3:35 Next, we’re summarizing the current legal tension with the Goldman family.

5:33 The Goldmans want their rightful payout from the Simpson estate. However, much of his assets are tied up.

7:36 Listen in as we discuss what it means to go through the probate process and the executor’s role.

8:55 When divvying up money from an estate, the probate expenses and executor must first be paid, as well as super creditors like the IRS.

Transcript:

Kirsten, where were you in June of 1994 watching the OJ Simpson and the Bronco on the 405? Well, actually, I didn’t watch it when it was happening. In 1994, I had a four-year-old and a two-year-old, so I was doing mom stuff. I didn’t have the luxury of sitting around watching TV.

Where were you? Well, I was eight years old. And at home, we had family in town, and I was channel surfing, as an eight-year-old would do. I know the younger generation might not know it – Never heard of that. Yeah. And I got stopped because I probably went through the first seven channels and it was probably on every single channel, you know, at that time. Yeah. We might have been watching the NBA finals. Don’t really remember what we were watching. I just know I got that remote snatched out of my hand. And that was the end of that evening. Yep.

Okay. Well, good, good day. Hello everyone. This is absolute trust talk. I’m Kirsten Howe here with Madison Gunn, and in case you hadn’t guessed — those of you who listen regularly and watch us regularly – you know we like celebrity deaths. We love to talk about celebrity estate plans and one of the biggest ones we’ve ever had just happened this week. Of course, we’re talking about OJ Simpson. Madison, what do you want to say about this case?

Yeah, we’re going to be careful because you can do a whole podcast on all the things about OJ and whether he did it or not. We’re not going to conjecture here, but we are specifically going to talk about how there is an executor for his estate who has come out and spoken in the press recently because there is a very large creditor of his estate with the Goldman and Brown family with their wrongful debt lawsuit. So we’re going to talk a little bit about that and how that works, in case anybody was wondering.

And okay, so this gentleman has come forward and said that he is the executor. A lot of times people use that word a little loosely. They confuse the word executor with the word trustee. And so, we don’t know, maybe there’s a trust. And that is what we almost always recommend for our clients here in California. So we don’t know, but apparently this man is some sort of personal representative, but an executor is someone named in a will who then has to come forward and be appointed by a court.

Yes, that ubiquitous “We need letters. What are letters? Can you write me a letter?”. Letters are issued by the court that say that you’re the executor or personal administrator or personal representative or administrator that say you’re allowed to go access to the decedent’s assets.

Yeah, and that has not happened. We don’t know that a probate has been filed. OJ just died a week ago. It would be very quick for a probate to already be filed. It’s almost unimaginable that the probate would have been granted by this time. Yeah, absolutely not. I mean, I don’t know what the courts are like in Nevada, but presumably he lives in Clark County, which is the majority of the population for the state of Nevada, you know, with the exception of up in Reno, like Washoe County. But I doubt that any of that’s happened yet. And there probably will likely be a probate, even if there is a trust. So that is one of those things.

Right, and the reason for that Is that even if you have a trust and everything’s buttoned up, you could avoid probate if there are creditors. They have a year – well, in California, they have a year – after date of death to file a probate to get their creditor claim paid. In Nevada, it might be a little bit different time-wise, but I presume it works the same. That the creditors have an opportunity to come forward and say “hey, where is our money?” Yeah, and so it’s always good to have a court order to bolster sure what you need to get paid. Yeah, yeah.

So the Goldman family, and presumably the Brown family – they had a judgment against OJ, which he has not ever fully satisfied. He got out of having to pay by various means. Well, you want to talk about that?

Yeah, so he had a judgment – I think it was like $33.5 million against him. From what I’m reading is that the – as vociferous as the Goldman family was about everything – they never, either they never got a court order or paid to go after the money. Just because you get a judgment in lawsuit doesn’t mean you just get the money. You have to work at it and fight for it, which they did. They got his, you know, book deal money. They probably got whatever was seized in the Nevada case with the memorabilia – things like that. I think they got his Heisman trophy, right? And things like that. They’re able to go after some things, but there were some things they were not able to go after and I think a little bit is he has income. That’s the majority of his assets were income, which is protected, and he lived in a state that they couldn’t access his home, which was Florida for most of – not where he died, but most of his life – after the lawsuit. They were able to get some of it, but not anywhere near the $33 million.

And that has grown to over $100 million because, yeah, in case anyone didn’t know, any legal interest is 10% a year, so. In California, I don’t know- Yeah. But that’s where the lawsuit was, was in California. Oh, yeah. Okay. So yeah, so it would be accruing interest at the rate of 10% a year. That’s huge. That is huge. The income that he had was – I don’t think he had any employment after all of this – but he had pensions, he had his pension from the NFL, he had a pension from Screen Actors Guild, he had Social Security, all of that retirement income is also protected. Protected from creditors. That’s federal law. So, they couldn’t get that. The only thing they could have gotten would have been assets. And he basically didn’t have any assets that were eligible for a creditor to come after. And so, the plaintiffs were thwarted, the Goldman and the Brown family were thwarted.

So now is their opportunity. Do we know what there is? It doesn’t say. The only thing that I saw was that his executor is reporting that he had a five-figure bank account in Nevada and just some memorabilia left. I don’t know what that entails. I don’t know if that’s just what’s going to be handled by the executor, and the trustee is someone different. If he is using the term executor correctly. There could be a wholly separate trustee. He could have more than one trust for all we know you know. He’s had a lot of time to figure out how to divest himself of assets so that this doesn’t happen. Sure.

Yeah, and so I don’t know that we even know if he was living in Nevada. But did he own his home, or did he rent his home? We don’t know that. If he owned his home, then that is now possibly subject to creditors, but we don’t know any of that. It’s still – we don’t know what happened with his home in Florida, we don’t know if he still owns that. Right. Yeah. Well, I had read that he put it on the market years ago – maybe five, six years ago – and he has been living in Nevada since his parole on the other matter. But we don’t know. It’s all speculation at this point. I’m sure that you and I will be talking about this later. That’s come out.

But I guess, I think just for clarification for our audience, this executor had initially made a statement in the press that, you know, “I’m going to make sure that the Goldman’s don’t get any of this money.” That was his statement. He backed off it a day or two later.

One of the important lessons here from an estate planning perspective –because that’s why we do this podcast is to educate, not only to entertain – let’s talk about what it means to have a probate estate and to be an executor. Yeah, I mean to have a probate estate means you’re very clearly following the rules of the probate. Probate is – and I’m sure I’ve said this before on other episodes – probate is the name we give the process in order to gain access and distribute someone’s estate, but it’s also the name of the law, so the probate code. You must follow the probate code when going through the probate process.

And to be the executor means your job is either A) to follow the will, B) to follow the law, and C) both. So, A, if there is a will, B, if there is no will and C, if there is a will also, you still must follow the law. His job would be to do that.

And the law says that creditors get paid. And he didn’t have any authority to come out and say, we’re not paying the Goldman’s. He has blocked that back and said he was just annoyed with the attorney for the Goldman’s So, you know, everyone’s human. Anyone who’s ever done this for their families, has someone in their family who’s passed away, you know, you’re not alone. Everyone’s human and this executor is an attorney. Obviously, she’s not an estate planning attorney or he probably wouldn’t have done that, but you know, that’s one of those things that you have to be careful about is that you don’t get to decide what happens with the estate. The will does, or the law does if there is no will.

Right and the idea in a probate is the administrative expenses get paid. You know, there’s filing fees, the executor has a fee, all of those things that gets paid. Then the creditors get paid, and there’s a hierarchy as to creditors and only then, then do the family members or beneficiaries get anything. So there may be nothing left. There are, I’ve read, I think you must – that there’s probably an outstanding balance due to the IRS, which is definitely what we call a Super Creditor. They would be the first priority, the first creditor paid. That’s right. The IRS stands at the front of the line of the creditors.

And the other thing about a Super Creditor is that you can never make them go away. They are there no matter what. So, you know, you can declare bankruptcy, you can do whatever you need to do, give assets away. They’re going to go after those assets and take them from the person you gave them to. Yeah, including beneficiaries. They’ll take them from the beneficiary regardless. They’ll go get their share.

We don’t know how much he owed to the IRS, if any. That’s all speculation. We just don’t know. But those are a couple of important points about probate. Yeah. The fun part is that that executor gets paid first. Yeah. Oh, of course. Otherwise, you don’t have a probate. You know if there’s no executor – nobody would do that job for free. Yeah. I don’t think so. They have to pay the administrative cost first, and then the creditors. And then if there’s anything left, that’s when the beneficiaries get their share.

It’ll be interesting to watch this unfold for sure. I mean everyone’s already always glued whenever his name pops up on TV, so it’ll be, you know, forever an interesting legal case – Cases – Cases, yeah it’s going to be – you’re right, he just – anytime you see his name, hear about him, it’s – you can’t help but pay attention. Yeah, it’s definitely “Stop the channel and go back to whatever it was,” and watch it just like that day in 1994.

Every time I mean, I just grew up, with we watched the trial in the house. We you know, my mom would come from work on our lunch break and watch the trial. It’s just you know; it shaped a lot of how things are now. We didn’t have a 24-hour news cycle. We didn’t have any of that. You know, we didn’t have the Kardashians. If it weren’t for OJ, you wouldn’t have the Kardashians. All of that came from OJ Simpson. Wow. Okay. Well, on that happy note, anything else? No, I think definitely we’ll be back. We will. We will visit this topic again and again, I’m sure. And thank you all for watching. It’s been fun. I hope it’s been informative and we look forward to connecting with you next time.

Resources Related to This Episode:

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