As a battle rages on in Nanterre, west of Paris, over the estate of Johnny Hallyday, who is best known as the “French Elvis”, and spills out across the pages of the tabloid press in France, we offer a view from Hallyday’s adopted home, Los Angeles, California. It is, after all, the central question of this affair whether a will and trust executed in California under California law, which was intended to dispose of assets that include Hallyday’s properties in Santa Monica and Los Angeles, will be respected or tossed aside as a violation of French forced-heirship laws. The saga of the Hallyday case is a cautionary tale for French nationals who reside outside of France or who have property or assets outside of France, or for foreigners who may be considered domiciliaries of France (or other nations with inheritance laws that differ from France), as well as for members of their families whose inheritance may be caught in between.
Hallyday died in December 2017 at the age of 74 after a battle with lung cancer. At the time of his death, Hallyday was married to his fourth wife, Laeticia. They split their time between Los Angeles and Saint-Barthélémy, a French Caribbean island, along with their two adopted children, Jade and Joy. Shortly after Hallyday’s death, his two adult children from previous relationships, Laura Smet and her half-brother David Hallyday, contested Hallyday’s California will and trust in the French court. Laura and David won an early battle when the French court froze Hallyday’s French assets, though the court declined to enter orders seeking to freeze assets located in the United States. In granting the request partially by freezing the French assets, the court explained that it appeared there was a real risk that such assets would be transferred to the trustee of the California trust, Bank of America.
Though it would not appear that the estate planning documents have been shared publicly (they would be in the U.S.), news reports indicate that Hallyday left the entirety of his estate to Laeticia, and after she dies, to Jade and Joy. Hallyday apparently left nothing to Laura and David, Laura has told the press, not a guitar, a motorbike or even a signed copy of the song “Laura” that Hallyday lovingly wrote for his daughter when she was very young.
Laura and David claim in the French court that the California estate planning documents violate French laws of forced heirship which require a portion of the estate (75% in Hallyday’s case because he had more than two children) to devolve to family members in certain percentages.
However, under French law, and particularly since August 2015 under the EU’s new Succession Regulation, which applies in France, the law governing the disposition of the estate of a French national, real and personal, and wherever located, is the law of the decedent’s last habitual residence or domicile.
Thus, therein lies the question: did Hallyday become domiciled in California? Analysis of that question is very fact dependent, and ultimately, the evidence must be weighed to determine whether subjectively and objectively, Hallyday intended to become domiciled permanently (or at least until he decided to change his domicile again) in California. For persons who have homes in more than one place, this can be a difficult question to answer. There are numerous factors that can contribute to this analysis, everything from payment of taxes to the place of one’s hair stylist. A decision from the French court is reportedly years in the offing.
Meanwhile, of interest, we wonder why Laeticia has made no effort to validate her late husband’s will and trust in California. Why has she thus far allowed herself to play solely on Laura and David’s home turf? Indeed, as evident from the court’s provisional remedy of freezing assets, the French court understandably would be biased toward the French law and tradition of forced heirship. One need only glance at the press to see just how unthinkable it is to the French mind that a parent would disinherit a child. Though such sentiments will find sympathy on a human level in the States, we have a different tradition, which we refer to as freedom of testation. Our natural instinct is to ask why anyone responsible for earning his fortune through his own labor (or even to have inherited it, for that matter) should be forced by law to leave his money to persons dictated by the government, particularly to a thankless or heartless child who has shown disinterest or disdain for the parents?
How might Laeticia proceed in California and what would be the impact? The California Legislature enacted a statute in 1994 that is somewhat obscure: Probate Code section 21103. Section 21103 provides: “The meaning and legal effect of a disposition in an instrument is determined by the local law of a particular state selected by the transferor in the instrument unless the application of that law is contrary to the rights of the surviving spouse to community and quasi-community property, to any other public policy of this state applicable to the disposition….” In other words, assuming California would have jurisdiction over the decedent’s will or trust, anyone, whether domiciled in California or Timbuktu, can select any law to govern the disposition of the estate under that instrument, as long as it would not offend California public policy. Of course, selecting California law to apply to one’s trust could not offend California public policy.
One can easily imagine that if Laeticia were to petition the court in California to validate the trust including its dispositive terms, a California court would do so irrespective of his domicile. Indeed, we recently obtained that very result for the trustees of the Douglas Raines Tompkins Trust. Doug Tompkins founded The North Face and Esprit apparel companies. After he sold the companies, Doug devoted the rest of his life to contributing his entire fortune to wildlife and land conservation. He bought millions of acres of land in Chile and Argentina and made deals with those governments to donate the land for national parks and wildlife preserves, as long as Chile and Argentina agreed to dedicate their own public lands for the same purpose. Doug’s contributions expanded Patagonia and created new national parks throughout the region. Doug’s daughter Summer Tompkins sued, claiming Doug had become a domiciliary of Chile and famously declared over and over that he never intended to return to the U.S. We successfully petitioned the California court to validate Doug’s Trust, which included a California choice-of-law provision. The courts agreed that his domicile was irrelevant and judgment must be entered against Summer without allowing her the chance to present any of her evidence.
There appears to be little doubt that Laeticia might well be able to obtain judgment sooner in California than Laura and David would be able to achieve in France. Whether France would give deference to a U.S. judgment is a question best posed to French attorneys. The French Supreme Court regularly defines and refines the rules applicable to the recognition of foreign judgments with non-EU countries (the U.S. and France do have a bilateral treaty with respect to family law judgments, but not to inheritance matters). On the other hand, while a California court would undoubtedly respect the final judgment of a French court if the parties had a full and fair opportunity to litigate the dispute, the California court would likely not do so after a California court entered a final judgment. Further, under California law, the California court has subject matter jurisdiction over a trust administered in California (Hallyday’s trust is administered in California by Bank of America) and personal jurisdiction over anyone who might have claims in the assets of the trust. Indeed, it would seem unwise were Laura and David to decline to appear in California to prevent entry of a judgment validating the trust. Not only would it be a judgment the French court might well feel compelled to acknowledge, but even if it would not, a California court would be unlikely to respect a French judgment that post-dates a California judgment the heirs had the opportunity to contest.
Without knowing the extent of Hallyday’s assets in France that have been frozen by the court in Nanterre, it is difficult to say whether a judgment in California could be blunted by “compensating” Laura and David with assets in France. For example, if the French assets total $75 million and the assets in the United States are $25 million, there would be more than sufficient assets in France to ensure that Laura and David receive their forced heirship shares without touching the assets in the United States. These are simply facts unknown at this time and might well factor into the legal strategy by Laeticia. It is also conceivable that Laeticia worries that the French court could enter orders against her personally, even if the French court would be unable to reach assets in the United States.
But wars are waged to gain leverage at the peace table, and to recoil from battles that can achieve leverage is to risk losing the war and the peace.