As discussed before, right after we hear of the death of a celebrity, we ask, “How?”. Not long after, we ask, “How much money did they leave and to whom?”.
Again, Whitney had traveled a troubled road of drug addiction and tough relationships. While alive, she had been separately sued at different times by her father, her step-mother, and her ex-husband—all seeking to collect more than $1 million from her. Whitney Houston leaves one child—an 18 year old daughter with a reported drug problem. Often, addictions pass genetically.
If you have been sued by someone when you are around to defend yourself, how much more likely are they to sue your Estate when you are not there to defend yourself? How capable is a young 18 year old girl to handle an inheritance? What does an addict do when they receive a large influx of cash?
Hopefully, Ms. Houston had good advisors that persuaded her to have well done Trust based Estate Planning prepared by an Estate Planning Attorney who limited their practice to Estate Planning. The needed Estate Plan would use a Living Trust as the foundational part of the planning. Almost all the assets she owned that had a title (not including retirement accounts) would be titled in the name of the Trust. The Trust would provide for how Whitney would be cared for if she became mentally disabled. After Whitney passed on, it would provide a sub-Trust for the benefit of her daughter. A sub-Trust that would have a trusted person as Trustee or an independent professional such as an attorney, CPA, or Trust Company or some combination thereof as co-Trustees.
The sub-Trust for Whitney’s daughter would provide for her and her care without much or too much control of the assets in the youngster’s hands. At some later age, or ages, the Trust might end and give the assets outright to the daughter. The Trust also may last for the daughter’s lifetime to protect her from lawsuits (like the ones against her mom), divorce, or squander.
Other Estate Planning vehicles could be used to limit or avoid the State and Federal Estate Taxes. Estate taxes are a “voluntary tax” and can be limited or avoided with careful planning.
Any Estate Plan would need to be kept up to date as three things are always changing: (1) the law; (2) what you own; and (3) your relationships.
Hopefully, Ms. Houston used an experienced attorney who limits their law practice to Estate Planning and has a “formal update program” that keeps the Estate Plan current as the law changes.
We’ll see.