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And the Moral of the Story Is…

Houston and her daughterTwenty years before the birth of her only child, Whitney Houston executed a will specifying how her assets would be distributed to any children she might have. What’s wrong with that picture?

That 1993 will provided for a testamentary trust that would distribute Houston's estate to what was to be her only child, at intervals, starting when her daughter, Bobbi Kristina Brown, reached the age of 21. 

Let’s stop our tale there for just a moment.  My clients will be able to tell you exactly what is wrong with that plan because they have heard it from me so often. However, for those of you who I have not had the pleasure of speaking to, allow me to tell you what the flaws are in that plan.  First, receipt of wealth at age 21 is unlikely to be a good idea for any child, no matter the degree of maturity or intelligence and that is especially true if it is a large amount of wealth, as it was in this case. Forcing distribution of wealth to our children from the grave (i.e., age 30, 35, 40) is not a good plan either.  A child going through a divorce, being sued or who has an addictive personality is not going to find that timing ideal.  There is a better plan.

Now that Bobbi Kristina has herself died, the media would have you to believe that the distribution of her mother’s estate, valued at estimated $20 million, is uncertain; after all, that sells newspapers. The truth is somewhere in between: "Everyone is going to try to grab [Houston's money], but it's not necessarily up for grabs," trusts and estates lawyer Jerry Reisman told USA Today.  "And it's a lot of money. Don't forget the royalties coming in [from Houston's music]. That estate is never going to end." 

With that in mind, what useful lessons might we ordinary folks learn as we design our own estate plan? Obviously, you need to have a contingency plan if one of your children predeceases you or dies before the complete distribution of their inheritance. It is wiser still to keep your entire estate plan updated; remember it as much about how and when your beneficiaries will inherit as it is who will inherit. In Houston’s estate plan; the portion of the Houston’s estate that Bobbi Kristina never lived to receive does name contingent beneficiaries. What we don’t know is what the estate plan is for the portion that Bobbi Kristina received prior to her death. Remember, even if Bobbi Kristina never create an estate plan, the State of New Jersey is ready to provide one. 

Unless Bobbi Kristina had a will herself, the money she had already received from her late mother’s estate will go to her next-of-kin: her father, Bobby Brown.  Nick Gordon and Bobbi Kristina reportedly called each other husband and wife but unless Gordon can prove that the two were actually married, he has no claim.  Given the aggravation a protracted lawsuit would pose, if he presses his case, he could receive a settlement. That is, unless a court finds him liable for Bobbi Kristina’s death, then most state laws would bar him from inheriting. 

As for the estimated $18 million of the Houston estate that Bobbi Kristina did not live to enjoy, Whitney Houston’s will provided that if her daughter died unmarried and without children of her own and without a will, the remainder of the estate would go to Houston’s two brothers and to her mother, Cissy Houston.  Bobby Brown would likely not be entitled to any portion of this part of the estate, even though he is listed as a beneficiary in the will.  Why? Because Houston’s will refers to him as “my husband, Robert B. Brown.”  Houston and Brown divorced in 2007, so he appears to no longer meet the necessary requirement of being her husband.   

You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707. 

Reference: USAToday.com (July 29, 2015) “Who will inherit Whitney Houston's millions?

 

 

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