The recent and tragic death of Whitney Houston has sparked many conversations about her life and accomplishments. One such conversation is whether or not she had a sufficient estate plan given the size of her estate. Often, people with sizable estates use trusts to control when and how their wealth is distributed.
It is assumed that Whitney Houston’s 18-year-old daughter, Bobbi-Kristina, is the main beneficiary of Houston’s estate, and it is also believed that Houston at least had a will. However, a will alone may not be the best estate planning instrument. Under a will, Houston’s 18-year-old daughter would receive Houston’s assets all at once, which may not be the best idea since many 18-year-olds do not have the financial maturity to handle a large inheritance. The use of a trust would likely be a better choice.
Frequently, folks with even a modest amount of wealth use trusts to disperse assets. In contrast to wills, trusts control when and how assets are distributed and would likely be a better choice when the beneficiary is a young person without financial experience. In the case of Whitney Houston, her daughter Bobbi-Kristina could receive various amounts as she turns older.
Whitney Houston’s estate planning case is also interesting because she divorced her former husband Bobby Brown in 2007. Often, individuals who go through divorce do not update their estate planning documents, which can have undesired consequences. Unless, Houston wanted Bobby to receive assets, she hopefully updated her estate planning documents and renamed beneficiaries on accounts and policies like life insurance.