Whitney Houston’s will was recently revealed, after it was filed with the probate court to open her estate, in Atlanta, Georgia. As expected, it named Bobbi Kristina as Whitney’s sole beneficiary. Beyond that, it was surprising for several reasons.
First, the fact that Whitney relied on a will — signed back in 1993 no less — instead of a living trust is troubling. We’re talking about the woman who signed the largest recording contract in history! If anyone should have thorough estate planning, including a living trust, it was Whitney.
Why? Wills have to pass through probate court to be effective, which makes them public record. That’s why information about the contents of her will is all over the internet. Inside Edition, for example, posted a copy of the will, here. In addition to being public, probate can be expensive, time-consuming, and a breeding ground for family fights.
Living trusts, on the other hand, when properly-used, keep matters private and outside of probate court. Most people with even modest estates are better served using living trusts, instead of a will. It’s frankly rather shocking that Whitney only had a will.
After signing her will in 1993, Whitney made one change, at least. She signed at least one codicil (an amendment to the will), dated April 14, 2000. There have been reports of a second codicil in 2004, but that has not been made public. The order from probate court which admitted the will only refers to a single codicil, not two codicils, which would normally be the case if there were in fact multiple codicils.
When Whitney signed the codicil, she named her mother, Cissy Houston as the executor, replacing the person named in her original will, the attorney who prepared that will. When the attorney who created a will also is named as an executor, it sometimes raises red flags. Whitney obviously had second thoughts about who she wanted in control of her estate, and that’s not a bad thing. Interestingly, Cissy Houston did not end up serving as executor, however. Instead, Whitney’s sister-in-law, Pat Houston, was appointed by the probate court.
So what else is surprising about the will? It did create a trust, but not a living trust as most people would do. Rather, the will calls for Whitney’s assets to be held in trust for her daughter, Bobbi Kristina, but Whitney did not create an actual trust while she was alive. This is called a testamentary trust, because it is created by the will, not during life. A testamentary trust can still function like a living trust, but it doesn’t have the advantages of avoiding probate court and privacy, which a living trust would have.
But, you certainly have to give Whitney credit for thinking that aspect of her estate plan through. As we wrote previously, without employing a trust, Whitney’s daughter would stand to inherit all of the money immediately, because she is 18 — legally, an adult. By using a trust — even a testamentary trust — Whitney was able to space out the distributions. So Bobbi Kristina will inherit 10% at age 21, another one-sixth at age 25, and the rest at age 30. There are provisions to allow for the money to be spent by independent trustees (Whitney’s brother and sister-in-law) for Bobbi Kristina’s benefit, for things like education, buying a home, starting a business, having a child, and more.
What else is surprising about the will? It was signed on Feb. 3, 1993, several months after Whitney’s marriage to Bobby Brown. In most states, a spouse has rights to elect against his or her share of the will and receive more than what was left to him or her; sometimes one-half of the estate, or even more. Georgia’s laws do not permit this (except for a limited allowance to the spouse for a limited period of time). But, Whitney created the will in New Jersey and the law where she lived at the time of her death would control this.
In other words, if she had still been married to Bobby Brown, even though she wanted everything to pass to Bobbi Kristina, Bobby Brown would still have the right to take a large part of the estate. This could have been avoided (at least in many states) with a living trust.
This problem was solved when Whitney divorced Brown in 2007. However, this raises another question. Why didn’t Whitney update her will after the divorce? Under the will, Bobby is named as the person Whitney wanted to serve as guardian for Bobbi Kristina if Whitney had died when Bobbi was still a minor.
As we wrote before, there is some concern that Bobby could still try to seek control of Bobbi Kristina, through a conservatorship (as was done with Britney Spears), if Bobbi Kristina is found to be not competent and at risk of harm. Whitney’s will suggests that she wanted Bobby Brown to be the person to assume this position if it was needed. Did she really still want that after their divorce?
And, the will stated that if Whitney did not have any living children when she died, her money would have been split between several family members, including Bobby Brown.
A critical component of estate planning is updating documents after important life events, such as a divorce. Whitney’s will should have been changed to remove any reference to Bobby Brown — or, if she still wanted him to be named as the preferred guardian for Bobbi Kristina and a potential beneficiary, then it still should have been updated to make that clear.
It’s a good lesson for your clients. Most of them would benefit from living trusts, beyond just simple wills. And, whether they have a will, trust, or both, it’s important to update their estate planning documents with life events, like divorces, new children, buying or selling a home, or starting a new business.
By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of the national television special, Trial & Heirs: Protect Your Family Fortune! For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update. You can “like” them on Facebook and follow them on Twitter.