MarketInsight | Where there’s a will, there’s a fight!
By Scott Grant
One of the most lurid and obscene documents you will ever read is the transcript of the trial in the New York lawsuit over the estate of J. Seward Johnson. Johnson was one of the sons of one of the founders of Johnson & Johnson, the company that makes Band-Aids and baby powder. At the age of 76, he divorced his second wife and married the upstairs maid. Basia Piasecka was 34 when she became the new Mrs. Johnson. Twelve years later, in 1983, her husband died and left his entire fortune of between $400 million – $500 million to the Polish immigrant who had arrived in New York with $200, setting off what one writer called “the largest, costliest, ugliest, most spectacular and most conspicuous” probate battle in American history. At the time, Seward Johnson’s estate was the largest ever to be probated in the State of New York.
The case finally went to trial four years later, in 1987. The four-month court battle cost more than $24 million in legal fees. Seventy-five witnesses produced 15,000 pages of testimony, much of which reflected poorly on the Johnson family, exposing tawdry details of incest, infidelity, cuckoldry, drug abuse, and attempted murder. The trial pitted the Johnson children, each of whom had received a trust that should have been worth $110 million, and an oceanographic institute versus the widow Johnson. The children accused her of treating her deceased husband like a dog, even keeping him on a leash at times, and bullying him into changing his will just two weeks before his demise. Basia Piasecka Johnson’s lawyers portrayed her as a loving helpmate who cared for and nursed Johnson during his decline.
In the end, the case was settled. Basia agreed to pay the children’s legal fees and give them almost $50 million. The oceanographic institute, Harbor Branch, got $20 million and Basia Johnson, the former maid, kept the rest, about $340 million, making her the 149th wealthiest person in the world. She turned the mansion into a golf course and moved back to Europe to collect art.
The biggest loser in the case was Basia Johnson’s attorney, Nina Zagat. Zagat was a friend of Basia’s and wrote the will that made her executor and trustee of the trust. Nina was to be paid $9 million as executor and then $900,000 a year as a trustee for as long as Basia lived. The Johnson children accused her of helping Basia to bully her husband into signing the will. The court cut her executor fees to $1.8 million and removed her as a trustee. Most of the jurors sided with the children and one indicated that Zagat’s testimony “did most of the damage to Mrs. Johnson’s case.” Zagat and her husband went on to start the Zagat Restaurant guide. They eventually sold it to Google for $151 million.
It is amazing how frequently estate fights destroy families. They are rarely about money, even the obscene amount of money accumulated by J. Seward Johnson. The fights are about hurt feelings and the type of family squabbles that often ruin Thanksgiving dinners. Outwardly happy families descend into chaos and fight over the most and least consequential of things, shouting about principle while lawyers get rich. There is no solution. It is a tale as old as Cain and Abel.
Scott A. Grant is President of Standfast Asset Management in Ponte Vedra Beach. He welcomes your comments or questions at email@example.com.