Did Whitney Houston Leave Too Much Money To Bobbi Kristina?

Whitney Houston’s estate was worth approximately $20 million when she died – plenty to meet the needs of her only daughter – Bobbi Kristina. Sadly, only a few years after Houston’s death, Bobbi Kristina died as well.

Although Bobbi Kristina’s previous boyfriend, Nick Gordon, is still a suspect in her murder, many say that having access to so much money at a young age was a contributing factor. Sadly, Houston’s estate planning mistakes are all too common.

Aunt & Grandmother Say Will Did Not Depict Houston’s Intentions

Houston’s aunt and grandmother filed a lawsuit to re-write the will as they say it didn’t accurately depict what Whitney really wanted for Bobbi-Kristina. They claimed that she was too young to handle so much money.

Although they likely had the best of intentions, probate courts must follow the terms of the actual will or trust documents, not what the person who died might have otherwise intended.

Whitney Houston’s will was created in 1993, specifying that a trust would be created after she died for any children she may have (so before Bobbi-Kristina was even born). Unfortunately, she never updated her will before she died.

Inheriting Money at a Young Age is Never a Good Idea

Whether this tragedy could have been adverted if Bobbi Kristina’s distributions were delayed until she was older is anyone’s guess. The bottom line is that inheriting large sums of money at a young age is generally never a good idea. Although the young beneficiary might be responsible, young people can be easily manipulated by others.

While it’s clear that Houston could have better protected that money with a stronger estate plan, she’s certainly not the only one guilty of not following through. In fact, many of us have the best intentions, but simply don’t make the time to create – and update – proper estate planning documents that can help beneficiaries.

Set Your Beneficiaries Up For Success!

You do have the power to set your young beneficiaries up for success. In most cases, that means creating a trust that allows them access to money over time and can be managed by someone you trust and has their best interests at heart.

We can provide you with the tools you need to protect your loved ones – whatever your situation may be. As Houston’s case shows, ignoring estate planning issues can have tragic consequences.  Contact us today and let’s get started protecting you and those you love.

Who Is Your Beneficiary? Marilyn Monroe Ultimately Had No Idea

When creating a last will and testament, it’s important to know your beneficiary. Sadly, that’s not always the case. Marilyn Monroe, one of the world’s most famous icons, didn’t seem to have any idea to whom she left her money.

Acting Coach & Psychiatrist Got Everything

Marilyn Monroe died at the age of 36 from a drug overdose. The year was 1962 and there have always been questions as to whom she named as beneficiaries. In fact, her business manager, Inez Melson, was allegedly suspicious about Marilyn Monroe’s will when it was first drafted.

Monroe’s will left some money to care for her mentally ill mother and bequeathed some of her personal belongings to Inez Melson. The remainder went to her acting coach and psychiatrist:

  • 25% to her psychiatrist to help those who couldn’t afford psychiatric counselling

 

  • 75% of the residue (the majority of her estate) was left to Lee Strasberg, her acting coach

A bit strange, but there it is, and Monroe could never predicted what happened next…

Strasberg’s 2nd Wife Takes Control of Monroe’s Fortune

Lee Strasberg controlled Monroe’s estate for a short while. Then, his second wife, Anna, took over. Although she only met Monroe one time, she created utter chaos for years. Here’s a brief rundown of what happened:

  • Multi-million lawsuit over publicity rights. Strasberg filed a multi-million lawsuit over publicity rights of Monroe’s image and likeness – and won. Ironically, she has since earned more money thanks to Monroe than Monroe earned in her lifetime.

 

  • Licensing deal on products. Strasberg made millions of dollars through a licensing deal with CMG Worldwide who sold products with Monroe’s picture on it such as cigarette lighters, pet clothing, and other “iconic” memorabilia.

 

  • Multi-million lawsuit over personal belongings. Strasberg also filed a lawsuit against the heirs of Monroe’s former agent, Inez Melson, for personal belongings in their possession. She won and auctioned them off at Christie’s for over $13 million.

Strasberg eventually sold her interest in Monroe’s estate for a reported $20 – $30 million.  Interestingly, Monroe has consistently been one of the top highest earning deceased celebrities since her death. Her estate earned $17 million in 2015 alone.

Consider Everything – Carefully

When creating an estate plan, it’s important to consider everything very carefully. While you may want a specific person to benefit from your estate (as Monroe wanted for Lee Strasberg), the probability that someone else will get control of your assets is likely unless you provide otherwise.

Monroe obviously had very good intentions for providing for help to those who are mentally ill.  Had she considered those intentions more carefully, many more people could have been helped.  Instead, someone she met once bilked her estate for their own purposes.

We can all learn from Monroe’s mistakes. We can help you come up with a good estate planning tool which provides for your family, friends, and charitable organizations. Call us today.

Celebrity Estates – Michael Jackson’s Estate Liable For $200M in Taxes Due to Unfunded Trust

Michael Jackson, the “King of Pop,” had always been a controversial superstar. Over the years, he became the father of three children, Prince Michael Jackson II, Paris-Michael Katherine Jackson, and Michael Joseph Jackson, Jr.

While Jackson created a trust to care for his children and other family and friends, he never actually funded it. The result? $200 million in estate taxes and years of court battles.

4 Essential Purposes of a Trust

A trust is a fiduciary arrangement which allows a third party (known as a trustee) to hold assets on behalf of beneficiaries. There are basically four essential purposes of a trust:

  • Avoiding probate. Unlike wills, funded trusts are not subject to probate as ownership is transferred outside of the grantor’s will. However, unfunded, or underfunded, trusts will go through probate.

 

  • Maintaining privacy. Probate is a matter of public record. However, since trusts aren’t subject to probate, privacy is maintained.

 

  • Mitigating the chance of litigation. Since trusts are not subject to the probate process, they are not a matter of public record. Therefore, fewer people know estate plan details – mitigating the chance of litigation.

 

  • Providing asset protection. Assets passed to loved ones in trust can be drafted to legal protection so assets cannot be seized by predators and creditors.

While these are arguably the most essential purposes, trusts can also affect what you pay in estate taxes as well.

Sadly, Jackson could not take advantage of any of these benefits. Although he created a “pour-over” will, which was intended to put his assets into a trust after his death, the estate still had to be probated.

The probate, along with naming his attorney and a music executive as his executers (instead of family members), fueled a fire that could have been avoided.  With nearly $600 million at stake, it’s no surprise that everyone wanted a piece of the pie.

Don’t Burden Your Family!

Losing a loved one is difficult enough without having to endure legal battles afterward.  In Jackson’s situation, a proper estate plan could have reduced litigation, legal fees, and estate taxes.  His situation, although it deals with hundreds of millions of dollars, applies to anyone who has assets worth protecting.  In other words, it likely applies to everyone!

There are many types of trusts and estate planning vehicles available to ensure that you don’t burden your family after your death.  We’ll show you how to best provide for and protect your loved ones by creating the type of estate plan which is tailored to fit your needs.

Celebrity Estates – James Brown’s “Vague” Estate Plan Forced Family into Years of Litigation

James Brown, the legendary singer, songwriter, record producer, dancer, and bandleader was known to many as the “Godfather of Soul.” Although he intended his estimated $100 million estate to provide for all of his children and grandchildren, his intentions were somewhat vague.  This forced his family into years of litigation which ended up in the South Carolina Supreme Court.

Everything Seemed In Order…

Brown signed his last will and testament in front of Strom Thurmond, Jr. in 2000. Along with the will that bequeathed personal assets such as clothing, cars, and jewelry, Brown created a separate, irrevocable trust which bequeathed music rights, business assets, and his South Carolina home.

At first glance, it seems as though everything in Brown’s estate plan was in order. In fact, he was very specific about most of his intentions, including:

  • Donating the majority of his music empire to an educational charity

 

  • Providing for each of his six adult living children (Terry Brown, Larry Brown, Daryl Brown, Yamma Brown Lumar, Deanna Brown Thomas and Venisha Brown)

 

  • Creating a family education fund for his grandchildren

However, only days after his death in 2006 from congestive heart failure, chaos erupted.

Heirs Not Happy With Charitable Donation

Apparently, Brown’s substantial charitable donations didn’t sit well with his heirs. Both his children and wife contested the estate.

  • His children filed a lawsuit against the personal representatives of Brown’s estate alleging impropriety and alleged mismanagement of Brown’s assets. (This was likely a protest of the charitable donation.)

 

  • Brown’s wife at the time, Tomi Rae Hynie, and the son they had together, received nothing as Brown never updated his will to reflect the marriage or birth. In her lawsuit, Hynie asked the court to recognize her as Brown’s widow and their son as an heir.

In the end, the South Carolina Supreme Court upheld Brown’s plans to benefit charities and recognized Hynie and their son as an heir.

Should You Anticipate Litigation?

Brown’s estate was substantial and somewhat controversial – and he failed to update or communicate his intentions to his family.  His heirs were taken by surprise.  And experienced attorney could have avoided much of the family upset.  Call our office today to protect your goals.