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A great battle begins for the estate of Middle-Earth

The author J.R.R. Tolkien was famous for writing "The Hobbit" and "The Lord of the Rings," epic fantasy stories about a major battle over who has the rights to old treasures like a gold ring and a broken sword. But the success of Tolkien's novels and the movies based on them has created a treasure of its own. Powerful forces are now fighting over bits of his legacy like Frodo fighting Gollum over the fires of Mount Doom.

The beneficiaries of the Tolkien estate and book publisher HarperCollins filed an $80 million lawsuit last year against movie studios Warner Bros. and others, claiming that the movie producers infringed copyrights and broke contracts with the estate that date back to 1969. The Saul Zaentz Co. made a counterclaim against the estate charging it with breach of contract. Recently, Warner Bros. counterclaimed against the Tolkien estate, claiming that the estate had caused it to lose out on millions of dollars in license fees by preventing it from going forward with a planned line of "The Hobbit"-themed casino slot machines.

Needless to say, there are few estates with the wealth or prestige of Tolkien's, but many families find their loved one's assets as precious as Gollum found the One Ring. A number of the issues that will come up in the Tolkien estate battle are common in probate litigation.

Trustees of estates have a fiduciary duty to run the business of the estate responsibly. When they misuse the funds, make imprudent investments or fail in other respects, they may be found to have breached that duty. However, these issues can be very complicated. What looks like financial negligence to one party may just look like bad luck to the other. When heirs feel they have been cheated, it sometimes looks to the other side like the heirs are being greedy or unrealistic. Those who are dealing with estate disputes should work to understand their rights and their duties.

Source: Hollywood Reporter, "Warner Bros. Claims Tolkien Estate Breached 'Hobbit' Contract," Eriq Gardner, March 13, 2013

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