Two months after the murder-suicide of her millionaire parents, Randi Jacobs thought her brother Mark was deliberately hiding their wills. She e-mailed his lawyer on June 18 to ask for copies.
A few hours later, Mark wrote a lengthy e-mail to Randi from his iPhone. He called her behavior “a tornado of irrational anger” and then laid bare decades-old tensions in the family of Irwin Jacobs, one of the Twin Cities’ most prominent business figures and a nationally known corporate raider in the 1980s and ’90s.
“Waste all the money and energy you want on lawyers trying to hurt others and trying to get money from your father’s estate whom you were not only estranged from but said was not even your real father,” Mark wrote.
He added, “No need to communicate with me anymore, as clearly you are not stable or trustworthy and now have chosen to do it all through lawyers.”
The fight spilled into the open last week after lawyers for Randi Jacobs won a temporary court order stopping Mark and other siblings from conducting an estate sale at the Lake Minnetonka home of Irwin and Alexandra Jacobs.
The immediate issue was whether the sale included possessions of Randi’s, but the two siblings have argued for months over her share of the inheritance. Her brother told her their father’s debts overwhelmed the family fortune and she might not get anything.
The case, playing out in Hennepin County Court in Minneapolis, has revealed deep-seated animosity that’s likely to complicate an estate settlement process already made difficult by the way Irwin Jacobs lived and died.
“The tragedy of this situation is that it happened, and the bigger tragedy is that the kids have been left to deal with this ambiguity as a result of the way their parents died,” said Tom Hubler, a Minneapolis-based consultant on family-owned businesses.
Starting in the 1970s, Jacobs used other people’s money to buy and sell companies, cobbling them together and breaking them apart. He was still relying on debt financing and may have owed millions when, on April 10, he shot and killed his wife and then himself.
They were both 77 and had been married 57 years. In a note to their housekeeper, he wrote, “I’m truly failing healthwise both physically and mentally.”
The deaths shocked the couple’s five children, friends, employees and many others in the Twin Cities. Two weeks after it happened, Mark Jacobs told the Star Tribune of his parents, “If our lives are 300-page books, this was page 300. There was a horrible tragedy, [but] there are 299 other pages in their lives other than this tragedy.”
Now the battle over the family fortune appears likely to become a lengthy and dramatic postscript. In interviews last week, lawyers for the children declined to discuss specific points of contention and said they remain open to settlement.
“There are a lot of moving parts, but that doesn’t mean that they all can’t be dealt with quickly and respectfully and fairly,” Kari Berman, one of the lawyers representing Randi Jacobs, said Friday. “That would be our hope.”
The process of sorting out a wealthy person’s estate often takes at least a year. For people worth $2.7 million or more, the executor of an estate is required to file an estate tax return nine months after the person’s death. Many Minnesota estate lawyers use that as a target, directing executors to get assets identified and liquidated and bills identified and paid.
But not all assets can be turned into cash quickly. The death of a business owner, for instance, can force an executor to sell the business, something that can take many months.
“The very first creditor is always the federal government or the state government,” said Ben Carpenter, who teaches estate law at the University of St. Thomas School of Law. “With an estate of this size, almost always there is an audit, which adds more time.”
For the Jacobs children, the value of their father’s assets is still being determined. In the 1990s, when Irwin Jacobs owned stakes in publicly traded companies, media accounts estimated his fortune at $400 million.
His greatest success, combining a series of boatbuilders into Genmar and making it the nation’s No. 2 producer of recreational boats, unraveled in the recession of 2008. Over the last decade, he continued borrowing money to run Jacobs Trading Co. in Hopkins and other small firms.
In one e-mail exchange in the inheritance case, Mark Jacobs wrote to Randi that their father had $110 million in debts and said she might not receive a $200,000 cash inheritance promised in his will.
Randi’s lawyers note that Mark Jacobs has provided no substantiation of such a large debt. “There’s been no appraisal,” Berman said, “no accounting.”
Documents in the probate of Irwin Jacobs’ estate show banks, credit card companies and two Las Vegas casinos among his creditors. The casinos claim Irwin Jacobs had a combined $3.6 million in outstanding gambling markers. The family rejected one such claim, part of the back-and-forth that’s routine in estate settlement.
Another issue is Minnesota’s “slayer statute.” Though Irwin killed his wife before himself, he is considered to have died first under the law in Minnesota and most other states.
With Alexandra as the first beneficiary in his will, his assets went to her. That raises the possibility that her will may ultimately wind up taking precedence over his in the way the family fortune is ultimately distributed.
Both of their wills were written in 2003 and are nearly identical, though small changes through the years created some differences.
Lawyers for the squabbling Jacobs siblings said last week that Minnesota’s slayer statute is not the main issue dividing them but may be a factor. One reason: Randi Jacobs is listed along with her siblings as a personal representative in Alexandra’s will but not in Irwin’s will.
Such a designation doesn’t necessarily mean that Randi would become the executor who settles the estate, but it may give her some leverage with her siblings. “You need to have a court order saying who the personal representative is,” said Barry Gersick, the attorney representing Mark Jacobs and other members of the family.
Late Friday afternoon, Hennepin County Judge Laurie Miller held a conference call among lawyers for the Jacobs children. Told they had not reached a settlement, she listened to their ideas for proceeding with the discovery of evidence as the case goes on.