Unfortunately, Whitney Houston used a Will based Estate Plan. Her “Last Will and Testament,” or Will, was admitted into Probate Court in Atlanta, Georgia.
As guessed, Whitney’s 19 year old daughter is her sole beneficiary of the Will with payouts to her at ages 21, 25, and 30. Meanwhile, the Trustee would make payments on the young daughter’s behalf, normally for “health, education, maintenance, and support.”
The down sides of using a Will include:
1. That it is Public Record in most states (like North Carolina). Anyone can see the Will and its terms.
2. The Administrative or Executor fees can be a large percent of the total Estate. (For example, 5% to 7% of the value of everything that goes through the Probate Court in North Carolina, i.e., $50,000.00 to $70,000.00 per $1 million, would be paid to the Personal Representative or Probate Attorney.)
3. Court costs, which is often a combination of Court charges and a Tax (up to $6,000.00 per person in North Carolina) that is charged against or deducted from the Estate.
4. Time Delay. The Time from when you put the Will into the Court system until you can start to pay out the Estate can be years. The average delay in North Carolina is 18 to 24 months.
5. Will Caveat is a lawsuit to break or set aside the Will. A jury often decides the case and in many states, like North Carolina, all of the attorneys are paid out of the Estate. Therefore, it is often easier to attack a Will, a jury decides, and even the attacking lawyers are paid out of your Estate assets.
If she had used a Revocable Living Trust that had all her assets titled in the Trust name, her Estate would have skipped the publicity, delay, court costs, higher administrative fees, and greater danger of a lawsuit of the Probate Court probating a Will.
We have yet to see if she did additional Estate Tax Planning to avoid or limit Estate Taxes on her Estate.
At least she had a Will. The statistics are 75% of people don’t even have a current Will, let alone an updated Revocable Living Trust with the assets titled to it.
Not a great Estate Plan for one of the world’s greatest singers. Her advisors should have gotten her to an attorney who limited their practice to Estate Planning and who, with Whitney, would have designed a customized Revocable Living Trust. Together, they would have retitled her assets into that Trust, and would have used a Formal Update Program to keep her Estate Plan current with the law.