West Palm Beach readers who have followed some recent discussions surrounding the use of trusts in effective estate planning may want to consider new activity surrounding the estate of pop music icon Whitney Houston. A recent petition to modify the testamentary trust set up for the benefit of the singer's daughter as a reminder of the importance of regularly reviewing estate plans.
A testamentary trust comes into being through provisions in a person's will. The will directs certain assets to be placed into a trust and describes the conditions for distributing assets to a beneficiary. The singer drafted her will in 1993 and set forth fairly typical trust provisions that would give her daughter only 10 percent of the singer's total estate upon reaching age 21. At age 25, the daughter would receive another one-sixth of the estate assets, and the remainder would be distributed when she reached age 30.
In the recent petition, the singer's mother and sister-in-law claim that the original terms of the will no longer adequately protect the singer's teenage daughter from exploitation by undue influence. They point out that the singer's fortunes increased dramatically between 1993 and her death earlier this year. If her recordings continue to sell, royalties could expand the value of the estate even more into the future.
While celebrity will contests tend to draw speculation over ulterior motives, the petitioners in this case are not asking for any particular changes to the will. They simply claim that the current will cannot fulfill the singer's intent of providing a lifetime of support for her daughter and they are asking the court for unspecified changes to conform to the singer's original intent.
Unfortunately, there is no good evidence to indicate whether the singer's intent changed over time or whether the original will reflects her goals perfectly well. Apart from a 2001 codicil, the singer appears never to have revisited her estate plans. Today's questions about the singer's true intent illustrate how important it is to regularly revisit and document one's goals over the course of a lifetime.
Source: Forbes, "Whitney Houston's Family Doesn't Trust Bobby Kristina's Ability To Handle Money," Danielle and Andy Mayoras, Oct. 2, 2012