Whitney Houston passed away in 2012. In her estate plan, Whitney named her daughter, Bobbi Kristina Brown, as her sole heir. In January of this year, Bobbi Kristina was found unresponsive in a bathtub in her residence. She has yet to regain consciousness. Bobbi Kristina’s story has a lot to teach us about how to protect our children with proper estate planning.
- 10% of Whitney’s estate was transferred to Bobbi Kristina on her 21st birthday
- Another 1/6th on her 25th birthday
- At 30, Bobbi Kristina gets the remainder
While the testamentary trust created by Whitney shows some foresight in holding back assets until her daughter is slightly older, it sidesteps the questions faced by parents interested in passing wealth to their children, including:
- Is my child mature enough to receive significant wealth with no outside guidance? When will he or she be old enough?
- Are there better ways to transmit wealth where I can avoid estate taxes?
- Can the money be protected once my child inherits my estate?
Moreover, Whitney’s Will was created when she was still married to Bobby Brown, when Bobbi Kristina was just seven years old. Whitney never updated her Will when she divorced Mr. Brown. In Whitney’s Will she named Mr. Brown as guardian of Bobbi Kristina at that time. As it appears Bobbi Kristina is now incapacitated, Mr. Brown is now insisting on being named Bobbi Kristina’s guardian, giving him more access to the Houston estate than otherwise due to his divorce from Whitney.
This dramatic story speaks to the importance of using your estate plan to protect your children from themselves, as well as the need to update your documents after a change in family status. It’s extremely unfortunate that Bobbi Kristina’s plight is common knowledge, and we hope for a full recovery, but we must learn from her situation to ensure we protect our families to the best of our abilities.
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