Litigation over the late Kirk Kerkorian’s $2 billion estate proves that when a lot of money is at stake, the provisions of a will and prenuptial agreement may be viewed as less than binding. Although this is a California case, it illustrates how the details involved in the execution of a prenuptial agreement can come back to haunt estate administrators.
Kerkorian, a Las Vegas developer who built the MGM Grand hotel, died in 2015 at age 98. His will directed an executor to distribute his money within three years of his death. But it’s taken nearly three years just to wade through claims on the estate raised by Kerkorian’s widow and others.
With billions at stake, it’s no surprise that the distribution of the estate’s assets has been anything but a straightforward process. Kerkorian left the bulk of his money to unspecified charitable organizations. He also had his fourth wife, Una Davis, whom he married in 2014, sign a prenuptial agreement giving up her rights to his money after his death in exchange for $10 million. Although Davis and Kerkorian separated after just two months, they were still married when he died.
Now Davis wants a third of Kerkorian’s estate, approximately $600 million. She argued in an “omitted spouse” petition filed in a Los Angeles Superior Court that she signed the prenup “under duress,” without independent legal counsel, and did not have an adequate understanding of Kerkorian’s financial situation at the time. Davis also maintained that the elderly Kerkorian lacked the capacity to make financial decisions at his age and was therefore unduly influenced by others. Finally, Davis also pointed out that although she signed the $10 million prenup, Kerkorian did not.
Executor Anthony Mandekic sought permission to oppose Davis’ omitted spouse petition, as required by California probate law. The Superior Court granted his request and Davis appealed.
On Jan. 19, the Court of Appeals concluded that the executor proved he had “good cause” to get involved in Davis’ lawsuit. It also noted that Mandekic’s familiarity with Kerkorian's financial and personal affairs put him in a position to advocate for what Kerkorian's intentions were in regards to leaving Davis out of his will. Further, Mandekic had no financial interest in Kerkorian’s estate, having already received a bequest that Davis did not challenge. Finally, allowing Mandekic to participate in Davis’ petition would bring the dispute to a quicker conclusion, the appeals court said.
Even though it’s undisputed that the will did not include Davis, it remains to be seen how this challenge to the prenuptial agreement will be resolved. Her allegations that she was pressured to sign the document without consulting an attorney of her own and the fact that Kerkorian was well into his 90s at the time are substantive issues for the court to decide. Adding an executor to the mix who is knowledgeable about Kerkorian’s intent and state of mind could be a turning point in completing the administration of his estate.