Another lesson in trust lawsuits – and for Floridians, on how to plan their estates in advance to avoid these sorts of fights between beneficiaries after death – is happening right now in Los Angeles, California. It’s a case being heard by the Chief Judge of the United States District Court for the Central District of California, Audrey Collins, and technically it’s not going to be found in trust law discussions so much as it’s going to be analyzed for its copyright law implications. But it’s still a trust situation — and it’s a big one: around half of the offspring are risking their bequests in a fight to get more of their late father’s assets, almost a decade after he passed away.
It’s a big deal. The decedent is Ray Charles, named by Rolling Stone magazine as one of the ten Greatest Artists of All Time. When Ray Charles died in June 2004, he left behind twelve (12) children who he had with nine (9) different women. He was 73 years old.
The children were born between the years 1950 and 1987, and it’s reported that Ray Charles gave each of his children a check for $1,000,000 in December 2002 at a family lunch meeting.
Ray Charles’ Children Fight For Rights to Hit Songs in Court, Battling The Ray Charles Foundation
Things hit the court system (again) back in March 2012, when the Ray Charles Foundation filed a lawsuit against several of the children of beloved American legend Ray Charles asking the judge to issue an order that the termination notices the kids had sent to Warner/Chappell Music were invalid. The lawsuit was based upon the copyright grant to songs like “I Got a Woman” and “Mary Ann” were terminated by his children as beneficiaries of to the late Mr. Charles’ will.
The Ray Charles Foundation filed the lawsuit as a charitable foundation that received Mr. Charles’ songs, as well as money and other assets, in Ray Charles’ Last Will and Testament. Royalty checks on every Ray Charles song accordingly were being sent to the Ray Charles Foundation by Warner/Chappell Music. The Charles Children sent the termination notice to the record company, terminating Mr. Charles’ grant of copyright to Warner/Chappell, and if respected by the record company, then those royalty checks would no longer be sent to the Ray Charles Foundation. Hence, the lawsuit.
In September 2012, the judge agreed with the Foundation that the Charles Children had no termination rights because the songs were made “for hire” and therefore no rights continued to the children for which they could exercise a termination right. However, the issue was not nailed down 100%, and now the litigation continues. Apparently, in copyright complications, the Foundation is continuing its fight, now arguing that the songs were not “for hire” in order to maintain that it has standing to proceed.
Larry Tolchinksy’s Tip:
There’s lots of probate twists and turns here. First of all, there was the issue of deciding who are the children of Ray Charles: when Ray Charles passed away at the age of 73, he left behind twelve (12) children. Charles had set up trusts in the amount of $500,000 each for all of his kids, told them he had done this back in 2002, and that upon his death each child could expect to get that half-million dollar legacy paid to them over a five year period. Charles also explained to them that the bulk of his estate would be placed with his charitable foundation, the Ray Charles Foundation.
It was messy. Charles’ children weren’t clear on things and there were challenges on how much he intended each of them to have, and there was confusion because Charles had stated that they would get “more down the line,” which they argued would involve rights to things like using his name for profitable ventures. Over the years, the kids have sued for things they believe to be rightfully theirs as well as suing for mismanagement of the trusts set up for them by Ray Charles before his death.
Seven of his kids are involved in the copyright lawsuit brought by the Foundation. By going forward with this litigation, these children are going against a condition of their irrevocable trusts, which state that they would not pursue these kinds of claims in exchange for receiving the benefits of their trusts. While their claims regarding copyright will proceed under federal copyright laws, the repercussions of going ahead with the termination notices and defending their rights to send those notices will be something to be reviewed under state trust laws.
It’s a defense that the Ray Charles Foundation is bringing up in its lawsuit: the charitable foundation is arguing to the court that these seven kids have breached their deal (their contract) with their father by trying to get control of the song copyrights: the foundation is stating that the kids agreed to take the $500,000 and not seek anything more – and now that their father has been dead 8 years, they’re backing out on that deal – unless the court orders them to respect it and in doing so, blocks their rights to any Ray Charles copyrights now.
And that’s not all: the Ray Charles Foundation is asking the California court for $500,000 in damages from EACH of these 7 children along with an Order that bars them from claiming any rights whatsoever in Ray Charles’ music.
In other words, the Charitable Foundation is telling the judge that these 7 kids have breached the deal so they shouldn’t get the money that was initially given them in that deal, it should be put with the rest of Ray Charles’ assets, there in the charity for charitable use. Which will be decided based upon the language in those trust documents.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org, or (954) 458-8655. If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments. He’s happy to take your call.