Dennis Hopper’s death left divorced wife Victoria Duffy in legal limbo and created big headaches for trustees. Trying to resolve the ambiguities is only making things worse.

Given the role of chaos in Dennis Hopper’s Hollywood career, some fans may find it grimly appropriate that his trustees look like they’re having to improvise to clarify the actor’s wishes for the fortune in art and real estate he left behind.

Others likely find it sad that this very improvisational approach to trust administration has exposed the $25 million the man left behind to a high-profile $45 million lawsuit and the threat of endless legal fees.

Back in 1996, when Hopper married fifth wife Victoria Duffy, the lawyers drew up a prenuptial agreement that looked iron-clad at the time. If Duffy and their 7 year old daugher Galen was still living with Hopper at the time of his death, she inherited $250,000 in life insurance and 25% of his personal wealth.

That would have given her claim to about $6.25 million, which basically boils down to the insurance benefit and the Venice California compound in which the couple resided.

But if either party filed for divorce — as he did back on January 14 — she was supposed to vacate the property within 60 days. Instead, she moved into one of several guest house on the same lot.

At that point, Hopper seems to have been too sick with prostate cancer and chemotherapy to confirm whether in his opinion they were still living “together” or not. He died in May, so now all we can do is guess.

In any event, Victoria evidently believes she now owns the California compound free and clear. She and daughter Galen never vacated the guest house.

Normally the probate court would decide who’s in the wrong and who gets the $6 million property, but the Dennis Hopper trustees seem to have jumped the gun by suing her.

And that’s where the fight really got ugly.

Estate plans should prevent lawsuits

Hopper’s Trust accuses Victoria of stealing about $1.5 million in art from Hopper’s art collection — modern names including Warhol and Banksy — that allege to belong to the Hopper Trust.

The trustees are following up that claim by suing her to get the art back. While they’re at it, they’re suing to get her out of the Venice house so they can sell it and, they claim, pay down Hopper’s debt.

Both legal actions are on slippery ground because they blur the line from running the trust in accordance with the grantor’s wishes and running the trust as an independent entity.

“This is why you want the trust documents as detailed as possible,” says Arthur Boelter, founder of Seattle law firm Boelter & Associates.

“Everyone has some perception of what the decedent wanted, but those impressions may not match up with the truth, much less each other. The worst thing you could do is create even the illusion of a conflict of interest by trying to fill in the gap and guess what the decedent was really thinking.”

In the case of the artwork, the trustees need to recover the lost property, but until it’s clear that Victoria actually took it, suing her to get it back only exposes the trust itself to litigation risk — a cardinal sin in a business that’s normally obsessed with minimizing risk.

The trust has already listed the Venice house for sale at a 25% discount. Its aggressively industrial look may make it a hard sell at any price in this market, but the naked attempt to force Victoria out of property she may end up owning free and clear also exposes the trust to expensive courtroom fights.

In fact, Victoria just filed a countersuit on Thursday alleging that the trustees — which include Marin Hopper, Hopper’s 48-year-old daughter by an earlier marriage — have been defaming her character and that they actually manipulated Hopper to sign the divorce papers in order to squeeze her and Galen out of the estate.

Technically, Hopper died a married man, and the absence of any effort to push Victoria off the property back in March indicates a corresponding lack of interest in enforcing the prenup at that time.

To be fair, Hopper was dying and the familywas understandably distracted. But a judge may wonder why the trustees waited until after Hopper was dead to enforce the prenup, much less audit the art collection.

Now Victoria wants $45 million in damages, lost income and legal fees, as well as what could easily run into hundreds of thousands of dollars in extra surviving spousal support. And as far as anyone knows, she’s still living in the Venice compound.

Since the Dennis Hopper Trust has reportedly estimated that it’s only worth around $25 million, that $45 million liability could literally wipe out everything the trustees were trying to protect for Hopper’s other heirs. Those heirs would also probably have been better served by letting professional trustees protect their legitimate interests for them.

Given Victoria’s claims that the family hated her, the judge may also question whether Marin Hopper in particular was acting out of concern for her father’s wishes or her own piece of the estate.

We can give her the benefit of the doubt, but even the appearance of a conflict of interest like this — especially where familial disputes are on the line — can be all it takes to send a court case the wrong way and doom a trust.

“You don’t want to put a beneficiary in the position where he or she is acting as trustee as well,” says Arthur Boelter.

“Even the appearance of a conflict of interest wrecks the normal checks and balances inherent in trust administration — especially in family situations. That’s where professional trustees prove their worth.”

Scott Martin, contributing editor, The Trust Advisor Blog. Steven Maimes contributed to the research and reporting.

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