Generally speaking, people tend not to spend too much time focusing on events they do not consider imminent, such as death. Nobody expects tomorrow to be their last day, and thus, estate planning, the process of preparing the transfer of wealth to loved ones after death, tends to lay at the bottom of most individuals’ to-do lists. The case of Max Hopper, whose lack of estate planning led to months of struggle for a grieving family in a situation where assets were highly mismanaged, is a perfect example of how important it is to have a plan in place to facilitate the process of transferring valuable assets to the intended beneficiaries.
A Brief on Max Hopper
Texas native Max Hopper was an IT manager with an extensive resume; he served as Chief Information Officer (CIO) of Bank of America, Senior Vice President (SVP) of American Airlines, and chairman of the Sabre Group, a company specializing in computer reservations systems, at various points in his life. In 2010, Hopper suffered a stroke and passed away unexpectedly without having written a valid will with instructions regarding the distribution of his $19 million estate.
The Aftermath of Hopper’s Death
Texas state law states that “community property,” or assets accumulated over the course of marriage, is to be divided among Hopper’s surviving spouse, Mrs. Jo Hopper, and Dr. Hopper and Ms. Wassmer, children from a previous marriage. Without a written will, however, the assets remained “undivided,” meaning that without an administrator who would divide the assets to all intended beneficiaries, one beneficiary would have access to all of Hopper’s inheritance. After pitching the family as estate-administration professionals, JPMorgan Chase was hired in 2010 to administer Hopper’s fortune.
Generally, when people hear the name of the country’s largest bank, they associate it with security, professionalism, and responsibility. From the beginning, JPMorgan was anything but these three in dealing with the family’s estate. According to the family’s lawyer, the bank neglected to “impartially and independently” collect and divide the estate’s assets, and took several years to release any basic interests in art, home furnishings, jewelry, and especially Hopper’s famed collection of 6,700 golf putters and 900 bottles of wine. To this day, more than seven years since the bank was hired as the administrator of the Hopper family’s estate, some assets still have yet to be released. At this point, it’s safe to assume that the family started to experience the drawbacks of Hopper’s failure to leave behind a written will.
Unfortunately for the Hopper family, the bank’s ridiculously long wait times were merely the beginning of their troubles with JPMorgan. The family alleged that bank representatives failed to meet financial deadlines for assets under their control, stock options were allowed to expire, and Mrs. Hopper’s wishes to sell stock were ignored. Stephen Hopper and Laura Wassmer, Hopper’s step-children, also claimed that the bank excluded them from decisions, and kept them uninformed with regard to the estate in an attempt to grovel to their step-mother.
Heading to Court: Hopper v. JPMorgan Chase Bank
Though the bank claimed that it acted in a professional manner, their mismanagement culminated in litigation when Jo Hopper sued JPMorgan for alleged breach of fiduciary duty. The bank denied any allegations, stating that they acted in “good faith” on Hopper’s assets. During the probate court trial, jurors discovered that after Hopper sued, the bank used money from the estate to pay its legal fees, depleting the original value of the assets by $3 million.
Resolution at a Cost – The Case’s Outcome
Before a verdict was decided, Mrs. Hopper had asked jurors to “send a message loud enough for JPMorgan to hear it all the way to Park Avenue in Manhattan,” recalled Alan Loewinsohn, the head lawyer for the Hopper family. After deliberating for several hours, the six-person jury returned a verdict to the trial at approximately 12:15 A.M on a Tuesday morning, siding in favor of the Dallas widow. Finally, after a four-week-long trial, the bank was found in breach of fiduciary duty and contract, and was ordered to pay nearly $4.7 million in compensatory damages and an additional $5 million in attorney’s fees. Most noticeably, the financial giant was ordered to pay over $4 billion in punitive damages.
The Importance of Estate Planning
Although being awarded a dollar amount in excess of $4 billion was indisputably a gargantuan win for the Hopper family, such an award isn’t guaranteed, or even common among individuals with whom estate planning cases go awry. In the trial’s aftermath, Mrs. Hopper stressed that “surviving stage 4 lymphoma cancer was easier than dealing with this bank and its estate administration.” Though we’ll have to ask her to find out if she made the statement facetiously, we know for a fact that preparing a detailed and accurately structured will with direct instructions on how to distribute the estate’s assets would have saved the family a considerable amount of headache.
While it is true that most people generally do not amass a net worth similar to Hopper’s, stressful situations like the one his family faced are entirely avoidable with proper estate planning. If you own any kind of valuable assets, whether they come in the form of real estate, bank accounts, investments, personal items, and/or anything else that you wish to pass down to your elk, consulting with an attorney to prepare a valid will and engage in estate planning will save your family time, money, and the burden that comes with taking a case to probate court. At the Law Office of Inna Fershteyn, we can provide you with the proper guidance to ensure you avoid the common mistakes associated with estate planning and successfully pass down your assets to your intended beneficiaries. Contact us today at 718-333-2394, or visit our website for more information.