Who’s the Rightful Heir to This Family Fortune?
A few weeks after their aunt's death, the Nixon children received a letter from the bank explaining their father’s cousin had laid claim to the inheritance. Who should get the money? You be the judge.
When their aunt Grace died, the Nixon kids figured they’d be coming into some cash.
Almost a century ago, in the heartland of Nebraska, their grandfather John Nixon had begun building a small fortune in the cattle-feed business that his father had started. It afforded him a residence in Omaha, a vacation home in Estes Park, Colorado, and the ability to set up a trust fund to support his family after his death.
Nixon died in 1965. As outlined in his will, his wife, Mary, was his sole heir. The will also stipulated that upon Mary’s death, what remained of the trust would be split between their two children, Grace and John Jr. When Grace and John Jr. died, their shares would pass to their spouses and eventually to their children.
When Nixon wrote his will, in 1964, only John Jr. had kids. Grace, 43 at the time, had never married. So Nixon added a provision: If Grace died without children, her portion would go to her brother and his family.
Mary died in 1980 and John Jr. in 1975. As expected, his wife and eventually his four children—Robert, Ken, Dianne, and Joanne—received what was left of his share. And when Grace died, in November 2006, John Jr.’s kids expected to get what remained of her share—around $600,000, which they planned to divide among themselves. After all, they were Aunt Grace’s heirs, since she had neither a husband nor children.
Or so they thought.
But a few weeks after Grace’s death, each of John Jr.’s children received a letter from Wells Fargo Bank. They couldn’t believe what they read. Another relative—their father’s cousin, Richard Daley—had laid claim to the inheritance. Daley, a retired orthopedic surgeon in Phoenix who was married with four kids, was also, to the Nixons’ great surprise, Aunt Grace’s adopted son. “That seemed crazy,” says Ken Nixon, now 60 and a pyrotechnics engineer in California.
Maybe not. It was no secret that Grace didn’t like her brother and his family. In 1985, she approached her cousin, Daley, to propose that she adopt him so she could help pay for his children’s education and also prevent her brother’s kids from inheriting more of the trust. She was 64; Daley was 50. He agreed.
Grace and Daley petitioned the Superior Court of Los Angeles County, where she lived, asking to have the adoption granted. In 1986, the state of California, which allows adult adoptions, approved the request. Grace instructed Daley to keep the adoption confidential, which he did—even from his own mother.
After the Nixons called Wells Fargo to protest Daley’s claim on the trust, the bank filed a petition in Nebraska’s Douglas County Court, asking the judge to make the official call: Which party is the legal beneficiary to Grace’s portion of the trust?
At a hearing in November 2007, each side made its case.
For the Nixons, it came down to this: Grace would have been prevented from adopting Daley in Nebraska, where John Sr. lived and where the trust was created, because most adult adoptions are illegal there. In addition, John Liakos, one of the Nixons’ attorneys, argued that Richard Daley could not have had two mothers at the same time. That, too, is illegal in Nebraska unless the birth mother gives up her rights. “This whole thing was a scheme to beat [the Nixons] out of their inheritance,” says Liakos.
Scheme or not, one of Daley’s attorneys, Heather Voegele-Anderson, argued that since the California courts found the adoption to be proper and approved it knowing that Daley’s mother was alive and had not relinquished her parental rights, Nebraska was obligated to recognize it. Plus, Nebraska had no laws denying adopted children their right to inherit. Furthermore, and most important, the will made perfectly clear that Grace’s heirs could include “persons legally adopted.”
Should Nebraska honor the adoption? Should Richard Daley get the inheritance? Were the Nixons victims of a scheme?
Next: The Verdict »
Under the U.S. Constitution, states must give “full faith and credit” to the judgments of other states. Which was exactly what the Douglas County judge ruled in December 2007: Nebraska was required to recognize the adoption that took place in California. Richard Daley, the judge ordered, is the sole beneficiary of Grace Nixon’s portion of the Nixon family trust. The Nixon siblings filed an appeal asking the Nebraska Supreme Court to review the case. Sixteen months later, on April 10, 2009, it upheld the lower court’s decision: Daley is indeed Grace’s rightful heir to the family fortune. Wells Fargo was ordered to deliver the trust’s assets to him. “My grandfather,” says Ken Nixon, “is rolling over in his grave.”
You be the judge!
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