Whitney’s 19 year old daughter Bobbi Kristina stands to inherit her mother’s multi-million dollar fortune following her death earlier this year. A payment plan had been put in place so she would reportedly receive a cash sum on her 21st birthday, with further pay outs when she turns 25 and 30. However, her grandmother, Cissy Houston, and the singer’s sister-in-law, Pat Houston, the co-executors of the estate, filed a legal petition in Georgia last month to put in place a new system to make sure Bobbi Kristina doesn’t have access to too much money all at once. It was not out of greed but more of concern of the possibility of Bobbi Kristina’s financial and lifestyle mismanagement and her possibly being a financial target by people who would exert undue influence over her inheritance or seek to benefit from her money and celebrity status. Bobbi Kristina, Pat, and Cissy are currently featured on The Houstons: On Our Own, documenting their life after their beloved family member’s passing.
The trust was set up before the singer’s death just before the Grammy Awards broadcast in February appointing her mother Cissy and sister-in-law Pat. They felt the distributions of Bobbi Kristina’s inheritance were not keeping with what Whitney had intended. Whitney wanted to ensure the future protection and security for her daughter.
Earlier this week the judge ruled in favour of Bobbi Kristina, Whitney Houston’s only daughter and upheld Whitney’s final wishes. Bobbi Kristina will receive 10 per cent of her inheritance when she turns 21 ($2 million), 20 per cent at age 25 ($4 million) and the balance on her 30th birthday ($16 million) as per Whitney’s final wishes.
Trusts such as that set up by Whitney Houston should not be thought of as a tool only for the “rich and famous”. A testamentary trust is the name given to a trust that is created in someone’s will, and only comes into effect upon that person’s death. The trust is a vehicle (a relationship really) whereby assets are transferred by the individual writing the will to one or more trustees. The assets are held and used for the benefit of the individual identified as beneficiaries in the will.
The trust can be structured as to provide income generated by a particular asset held in the trust to one beneficiary or a set of beneficiaries (often the spouse or children) for their lifetime.
Properly prepared trust provisions in your will provide guidance to your nominated trustees on matters such as:
- How the asset of the trust should be invested?
- When and how the asset of the trust should be distributed to the beneficiaries?
- When and how the trust will come to an end?
There are also other added advantages of a testamentary trust such as:
- Control of timing of distribution of assets
- Planning for blended families
- Taxation Advantages
- Pension Benefits
- Spendthrifts and people with disabilities
Estate litigation can turn families into enemies and convert inheritances into lawyers’ fees. Here at Attwood Marshall we have a bird’s eye view of the issues which fuel such disputes and are often able to anticipate potential issues before they erupt, so they might be avoided in the future.
So do yourself and your family a favour by making an appointment today with a Wills and Estate Planning Lawyer from Attwood Marshall to discuss your Estate Plan. Please contact our Department Manager Lesley Barnes, on direct line (07) 506 8241 or by email on firstname.lastname@example.org to arrange an appointment.