Ernie Banks Estate, Part 5: Rights of Publicity
The Ernie Banks Estate is not becoming any less contentious as time passes. His widow and his caretaker/executor continue to do battle over information in probate court.
Today’s post will first bring you up-to-date on the citation proceedings introduced in my last post. Then I’ll highlight some of the revelations contained in the recent pleadings, including control over the rights to Banks’ name and likeness, some recent prominent estates dealing with this issue and a discussion of the Illinois law surrounding rights of publicity.
To recap, here are the first four parts in this series:
- Ernie Banks and the Illinois Disposition of Remains Act
- Ernie Banks Estate, Part 2: Probate vs. Non-Probate Property
- Ernie Banks Estate, Part 3: Creditor Claims Against the Estate
Citation to discover assets dispute
You’ll recall from my last installment that Judge Riley gave the parties until May 29 to try to work out issues relating to proper disclosures under a discovery citation filed by Elizabeth Banks against Regina Rice. Elizabeth sought information on a joint account, trust assets and a Banks memorabilia website. Rice resisted these disclosures claiming that Elizabeth was not entitled to this information because these are not probate assets.
They failed to agree. Instead, Elizabeth filed a Motion to Compel, and Rice responded. On May 29, Judge Riley decided that Elizabeth was “entitled to see” the information. Rice was ordered to turn over (within 30 days) three years worth of records relating to bank accounts (see below) and the erniebanks.net website. As noted in my last post, a discovery citation is a permissible “fishing expedition.” The next status hearing is scheduled for July 24.
Elizabeth’s attorney, Tom Jefson, noted that “We are looking for that information to make our own determination if we should request the court to bring these assets back into the estate.” As explained in my last post, they are using the discovery citation to determine whether to file a recovery citation to contest purported gifts and transfers to Rice.
New revelations in response to citation to discover
As part of the citation battle, Rice prepared a ‘Response to Citation to Discover Assets’ that was filed along with Elizabeth’s Motion to Compel. As laid out in this May 18 Chicago Tribune article, the pleadings and correspondence (which I have reviewed) contain several interesting new pieces of information:
1. $75,000 IRS debt. Ernie Banks entered into an Installment Agreement with the IRS for payment of taxes for 2009 and 2011 in the amount of $75,000, excluding penalties and interest. No further information was provided as to the current disposition of this debt. This debt could be a third-class claim against the estate (I wrote about claims here).
2. Two bank accounts. Rice asserts that Banks had just two known bank accounts — an account at Associated Bank titled in the 2014 Trust and a checking account at Bank of America held jointly with Rice. Rice alleges that she was made joint owner on the B of A account on August 28, 2010. Balances were not provided.
3. Banks memorabilia website. Rice asserts that erniebanks.net was “administered by Rice, and to give to charity.” The filing notes 102 items currently held by Rice, although the offerings on the website have since been removed.
4. Gifts to Rice. Rice lists 4 items gifted during life from Ernie Banks to Rice: (1) Babe Ruth Sulton (sic) of Swat award; (2) Replica statue of Ernie Banks; (3) 2010 Living Legend Louisville Slugger Ring; and (4) His mother’s scrap book. Incidentally, Ted Williams’ “Babe Ruth Sultan of Swat award” sold at auction for $200,000; Mike Schmidt’s sold for $54,510.
5. Rights to Ernie’s “name and likeness”. Finally, Rice asserts that the “rights to his (Ernie Banks’) name and likeness” were transferred by Banks to his 2014 Trust (of which Rice is trustee). This is the subject of today’s discussion.
Transfer of a decedent’s name and likeness (publicity rights)
The revelation that the right to control Banks’ name and likeness is held (at least for now) by Rice as trustee of the 2014 Trust is significant. As noted by Rice’s attorney back in February, the true value of the estate may be in the future sales and distribution of Banks’ name and likeness.
Control and ownership of a decedent’s name and likeness is referred to as a “right of publicity” (or “publicity rights” or “personality rights”). Publicity rights do not involve marketing a preexisting product like a book or movie — these are generally covered by existing copyrights. Rather, post-mortem publicity rights is concerned with a new representation of a decedent’s identity (i.e. name, image or likeness) used for commercial purposes.
Unlike copyrights and trademarks that are protected by Federal laws, publicity rights are governed by state property law. For post-mortem publicity rights, the law of the state where the decedent was domiciled generally applies. Some states (including Illinois — discussed below) have statutes that allow publicity rights to continue for a specified number of years after death; in other states, publicity rights do not survive death (e.g. New York).
I think most would say that publicity rights ought to be transferable to heirs, as opined in an article by Marc A. Lieberstein. For an alternative viewpoint, read this NYT op-ed piece by Professor Ray Madoff.
The Illinois Right of Publicity Act
The Illinois Right of Publicity Act (“IRPA”) statute went into effect on 1-1-1999 (765 ILCS 1075) for decedents dying on or after the effective date. Prior to IRPA, there was no protection of publicity rights after death in Illinois. The ‘descendibility’ of publicity rights is provided in Section 15 of IRPA:
The rights under this Act are property rights that are freely transferable in whole or in part to any person either by written transfer, including but not limited to wills and trusts, or by intestate succession only to an individual's spouse, parents, children, and grandchildren, except that the rights under this Act are not subject to levy or attachment and may not be the subject of a security interest.
If transferred as provided in Section 15, then Section 30 of IRPA protects against the unauthorized use of the deceased individual’s identity for commercial purposes for a period of 50 years after death.
These rights may be transferred to anyone (or to any legal entity) through a will, trust or similar instrument, but only a spouse, parents, children or grandchildren (and not, for example, siblings) may inherit through intestate succession.
IRPA also covers the rights of the living to control, and sue over, the unauthorized commercial use of one’s identity. Reported Illinois cases include Michael Jordan v. Jewel Food Stores (still pending) and James Brown v. Corbis (initiated in 2002 before Brown’s death). The latter case prompted the Illinois legislature to consider (though reject) domiciliary changes to the statute in 2008.
Celebrity estates with publicity rights in the news
This is actually a recent hot topic in estate planning circles due to a couple of celebrity estates in California:
- Michael Jackson. The King of Pop’s estate is locked in a high-stakes battle with the IRS over the estate tax valuation of Jackson’s name and likeness. Jackson’s estate reported the value of Jackson’s name and likeness at $2,105. The IRS countered at $434 million(!). Both of these extremes seem “off the wall.” Resolution of this dispute is pending and is likely to create precedent (at least in a general sense) for future cases.
- Robin Williams. Perhaps in response to the Jackson estate tax dispute, it was recently revealed that the comic legend bequeathed the rights to his name and likeness to the Windfall Foundation (a charitable organization set up by Williams), or if Windfall Foundation does not qualify for the estate tax charitable deduction, then to a charitable organization with a similar purpose. Williams also forbid commercial use of his image for the next 25 years. Williams’ planning with a charitable beneficiary should moot any question over the estate tax value of Williams’ name and likeness. Perhaps Williams also sensed that the use of his name and likeness could be (another) contentious issue between Williams’ third wife and his children from a prior marriage.
Not surprisingly, California has a robust publicity rights law protecting a beneficiary’s rights for up to 70 years after death.
Valuing Ernie Banks’ publicity rights
So what is the value of Ernie Banks’ publicity rights under the protection of Illinois law? Now that’s a tough question. I think that valuing this type of asset is inherently difficult and requires a lot of guesswork that may be highly dependent on the skill and actions of the person(s) who has the right to market the decedent’s name and likeness.
In this case, the true value might even be partly dependent on the ongoing estate litigation:
- Will the ability to market Banks’ name be hamstrung by years worth of contentious supervised estate litigation?
- Will the brand be diminished by such litigation?
- Might third parties be less inclined to license Banks’ name if it is controlled by someone viewed by some as having taken advantage of Banks?
Might value also be effected by the current Cubs success on the field? Imagine if the Cubs win the World Series this year as predicted by the Back to the Future trilogy (insert joke here if you must). Undoubtedly, Banks’ brand is tightly linked to the Cubs brand.
Even without these specific issues, at the time of an individual’s death a valuation of this nature seems highly speculative. One might have surmised that questions surrounding Michael Jackson’s personal legal problems would adversely affect the value of his legacy. As it has played out though, that seems to not have happened.
It seems to me that assigning a value to a deceased celebrity’s name at the time of death is more like a prediction than a valuation.
Regardless of estate tax value, control of Banks’ legacy through his name and likeness will be at the heart of any will and trust dispute.
Additional updates in the Banks Estate
1. Claims allowed and claims filed. Two of the three pending attorney fee claims filed were approved on May 26; the other was continued. On June 3, another fee claim was filed — this one by Kipnis, Rosen & Bloom, Ltd (CPA firm) for $5,100. The fee includes representation at an audit on May 5, 2015. The claim will be heard on June 22. In total, that’s the fifth filed fee petition.
2. Spouse’s award application. On May 20, Elizabeth Banks filed an application for spouse’s award. Elizabeth’s one-page filing seemingly requests only the minimum ($20,000) spouse’s award. The minimum award is automatic by statute (755 ILCS 5/15-1), yet (curiously) a briefing schedule to respond to the application was set, and a hearing is scheduled for July 24. I plan to cover this topic in detail in a future blog post.
3. Amended Inventory. On May 7, Rice filed an Amended Inventory. After brief review, the amended inventory appears substantially similar to the original Inventory in that it includes a long list of personal effects, but at least one financial asset was added — a Limited Partnership interest in Harry Caray’s Tavern Navy Pier LP. The extent or value of the interest is not further detailed.
4. Waiting on the will contest. It’s worth pointing out again that the will (and trust) has not yet been contested. Banks’ widow and children have until August 10 to file a contest. It’s also interesting that since an initial public statement by Banks’ children back in February, they have not since publicly commented and as far as I can tell have not filed any pleadings or been directly involved in the court hearings. Of course, that could change at any time.
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