Whitney Houston’s Will

Whitney Houston’s Will

By: Martin M. Shenkman, CPA, MBA, JD

Whitney Houston’s Will Nancy Grace made two points about Whitney Houston’s will. First, that her ex-husband was still named. Second, that her daughter would receive all of her inheritance outright by age 30, but she assured viewers she would be provided for until then. Let’s take a look at what these comments really mean to Bobbi Kristina Brown. Divorced husband as beneficiary – under state law when someone is divorced, they are removed as a beneficiary of their ex-spouse’s will, unless the divorce agreement provides to the contrary. So the hoopla Nancy made over this was for naught. And if Whitney Houston provided for her ex-husband, then that was a negotiated and conscious decision. The issue that really exists in these regards is that, if Whitney had a pension plan, the beneficiary designation could trump the will. And if it is a qualified ERISA pension plan, state law won’t trump federal law, and an old beneficiary designation will control. Another real issue is where Whitney’s advisers were? How could someone of her stature, with a child, divorce and not sign a new will and review her planning? While there is some mention of Whitney signing a codicil in 2004 for her old 1993 will, shame on the lawyer that used a codicil instead of signing a new will. First, the old will was old! Laws changed dramatically in 2001. Further, a codicil is usually a bad choice; it introduces the potential for inconsistencies between the two documents. The second point Nancy Grace made hay out of, was that the daughter Bobbi Kristina would receive her distribution outright at age 30. The will supposedly provided for 10% at age 21, 1/6th at age 25 and the balance at age 30. What a shame. No divorce or asset protection, and the tax benefits that could have been afforded to keep a meaningful portion of the estate outside Bobbi Kristina’s estate forever, all lost. Poor planning. Yet another story of another Hollywood megastar with mediocre planning.

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