Wow, just wow. Usually when I read articles about an investment bank doing something dodgy, I can play devil's advocate and talk it through from their point of view. But this time I am struggling to do that. So many things were done that were not just morally wrong, but legally too. I struggle to believe there was no one at JP who didn't point this out.
So to me, the use of the funds for legal fees is not in and of itself an issue.
My original post wasn't being serious (hence the /s), but if there's no proof of you taking them and no activity on the blockchain for the wallet, there's not much that can be done.
This attitude is the principal reason Bitcoin, specifically, is probably fucked.
In terms of abstractions, the analogous scenarios for the estate planning case:
1. Private keys secret-split between individual heirs and dead-man's switch - beneficiary.
2. Private key mutually secret-split between heirs - work it out, possibly escalating to probate.
3. Private key sitting around on paper waiting to be picked up by whomever discovers it - same as cash sitting around.
4. Private key known only to decedent - value escheats to the void (or the currency itself, depending on your interpretation).
The question whether Bitcoin specifically is fucked is whether it is strong enough to survive the inevitable clash with the traditional  legal system that will insist on destroying one of its core properties. Morons that brazenly advocate stealing cryptocurrency don't help, but a lack of them wouldn't mean the state would remain uninvolved, either.
 Yes, "the" legal system is one of many possible legal systems. The philosophy of common law asserts that it's inevitable and manifest. But it's anything but.
There are all kinds of sharks in the financial and legal industry that prey on unprepared people.
I and people I know have been screwed by these types, and it always comes down to not having a will. If you don't have a will, you're subjecting those you care for to dealing with these sharks. Don't do that to them.
As always, the sharks are in the family. Your descendant would rather have the whole fortune dilapidated than miss a dollar of it.
He died without a legal will (what he did write was hand written, holes so large you could drive a truck through, and un-witnessed). Though the estate was modest (maybe $400K in home, vehicles, stocks) and could easily have been divided pretty equitably with the second wife (who was pretty recently married to him), the two of them's inability to get along, and always think that the other was plotting against them...
lead to long drown out probate court challenges, and in the end they walked away with less than $100K between them, burning the rest in the process.
Heirs disagree all the time. That’s the point of hiring an independent administrator.
How could the bank have screwed this up so badly?
It's just one long series of someone screwing up badly and thinking "wait!? I can fix this, I've got a crazy idea that just might work", then proceeding to fuck up even more.
Though with the lengthy timescale it would not at all surprise me if someone got promoted several times for the (prior to the verdict) "great" handling of the afairs. Whoever went to the boss saying "yea, we drained the entire estate into legal fees for our-selves, and now we're even indebting it while keeping both sides fighting" would have at the time been seen by them as a candidate for employee of the year.
The 8 billion is outrageous and far too much, but I would love to live in a world where they actually had to pay that amount. Maybe not all to the victims, but most of it to some charities and non-profit organisations fighting for citizens rights against banks. It would seriously send a signal that all this kind of just horrible behavior on the part of the banks isn't profitable in the long run, and could potentially blow your entire organisation out of the water. Making things like moral codes and proper training actually matter to them. As it is, they'll likely just pay a couple of million and scrug it off as an ok attempt at stealing from their clients. The 99 other cases where it actually worked will foot the bill for this time when it failed.
Reminds me of that scene at the end of American Made, where Monty Schafer drops by a colleague's office and says (paraphrased) "Here's an idea, let's sell arms to Iran".
In other words: we're gonna need a bigger shovel.
That said, the bank behaved in a terrible way, but the most important takeaway is that if you have any wealth at all make sure you leave a properly signed and witnessed will.
What makes the article new worthy is that the bank lost when it overstepped its bounds, and that this was only possible for someone with an estate of several million dollars. It shows how biased the American legal system is against people without money. How did I come to this conclusion? It's simple, JPMC clearly knows what they are doing when it comes to probate and the legal system. This wasn't some novel plan they had to make money on estate. They knew exactly what they were doing and what moves they could play. It was a shock to them that they lost, and they lost because the plaintiffs had a legal team that could understand and combat it. Most attorneys couldn't handle a case like this, and those that do aren't cheap.
I've no idea what probate/intestate law in Texas looks like, but one party (probably the wife) should have had priority to be the executrix. The children could have fought her appointment, insisted on court supervision of her actions, sued the estate to contest disbursals, etc. The wife could have similarly spent money to defend herself, pay herself an outrageous salary, etc. But she would have been much less brazen and the end result would have just been the all-too-common story about one member of a family screwing over the others.
I don't see any mention of lawsuits resulting in the involvement of JPMorgan, only those filed afterwards. The story  makes it sound like Jo acquiesced to hiring an "independent" administrator, which seems to be a case of no good deed going unpunished.
So I stand by the idea that complications from (seemingly voluntarily) hiring a third party executor for $230k puts the situation squarely within "first world problems", meaning caused by out of touch affluence. A family with lesser means would have had to work it out for themselves, under the pointed threat of the entire estate being immediately consumed by legal expenses.
 Granted, the whole article is in terms of her side of the story.
Neither Jo nor the children wanted to negotiate. They forced each other to have a third party and they fought until there was nothing left to inherit.
A family with lesser means would ruin themselves with a cheaper executor. It's really common.
Many other estates with independent administrators and much less value end up similarly screwed up, but don't end up with eye-popping verdicts because no one has enough money left to fight the administrator.
It just so happens that these folks did. It is a total shame that it takes this much money to fight, but one can hope that this big of a verdict makes some of the smaller fish rethink their strategies.
One can hope, anyway.
>>First world problems, 6700 putters and 900 bottles of fine wine.
First world problems until the bank got involved and took away the "first world problem" thing from them.
And there goes the Streisand effect. $8B isn't something the bank will take slightly, but the more this case is discussed, more people will hear about it and (probably) avoid hiring this bank in the future.
I don't think this kind of service is a significant insource for the bank, but also think it should be much, much cheaper had the bank taken some care with this case.
The Streisand Effect is when an attempt to censor information from becoming public backfires and instead spreads the information more widely due to public attention.