The Huffington Post reports that Whitney Houston’s will left everything to her daughter, Bobbi Kristina.
Upon turning 21, Bobbi Kristina will receive part of the money, more of it at age 25 and the balance at age 30. Houston’s trustees can give her money from the trust for various purposes, including tuition, to buy a home and to start a business.
We would have recommended that Whitney go a few steps further. As the will was drafted, Bobbi Kristina’s inheritance remains mostly in trust until she is 30, when the balance is distributed to her outright. While in trust, the assets are significantly protected from divorce claims and lawsuits.
Why end the divorce and lawsuit protection when Bobbi Kristina turns 30? Is divorce and asset protection any less important after 30? No. In fact, divorce and lawsuit protection becomes more important after age 30.
We recommend to most of our clients that they design their living trust to distribute their assets to their children in lifetime protection trusts. At a certain age (say 25 or 30), each child can become his or her own trustee, gaining control of the trust but maintaining the divorce or lawsuit protection of the trust indefinitely.
One further point. Wonder how the Huffington Post knows about Whitney’s estate plan? It’s because she had a will not a living trust. Wills must be filed with the probate court and become a public record. Living trusts don’t have to be filed with the probate court, so they don’t become a public record.