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  • Jenny Rozelle, Host of Legal Tea

Celebrity Estate Planning - Whitney Houston - Episode 26


Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. We’re back to “estate planning of the rich and famous” where we chat about celebrities and their estate planning. Today’s episode is on Whitney Houston – who, in my very personal opinion, is one of the greatest. I mean, it’s, like, impossible to hear a Whitney song and NOT dance – or maybe that is just me. But I don’t think it is…


As always, let’s talk a little about Whitney personally before we dive into her estate plan (or lack thereof…). According to Whitney’s Wikipedia page, Whitney met R&B singer, Bobby (Bobby with a Y – which will be important here in a second…) in 1989 and after three years of a relationship, Whitney and Bobby (with a Y) got married in 1992. Eight months later, they welcomed a child, a daughter specifically, named Bobbi (but with an I). They did not have any other children.


However, according to her Wikipedia page, in 2006, Whitney and Bobby separated and Whitney ended up filing for divorce. The divorce was finalized in 2007, and Whitney was granted custody of Bobbi, their daughter. Bobbi was, of course, still a minor at the time. A couple years after the divorce was finalized, Whitney sat down for an interview with Oprah in 2009 – and disclosed that she during her marriage and even after Bobbi was born, she had been using and abusing drugs. As the Oprah interview concluded, Oprah asked Whitney if she was drug-free and Whitney stated, “Yes, ma’am. I mean, you know, don’t think I don’t have desires for it.”


Unfortunately, in early 2012, specifically February 11, 2012, Whitney was found unconscious and submerged in the bathtub in a room at the Beverly Hilton Hotel. The cause of death was reported to be “drowning and the effects of … heart disease and cocaine use.” Unfortunately, the LA County Coroner’s Office stated that cocaine was actually found in Whitney’s system, along with Benadryl, Xanax, and Flexeril. I think everyone was sad to see she did, indeed, have cocaine in her system – so sadly, Whitney’s past drug use and abuse re-surfaced and she was using again.


According to a New York Times article, Whitney’s sister-in-law and manager, Pat Houston, who was subsequently appointed as Whitney’s estate’s executor, said something that I think is really important to remember about Whitney. Pat shared:


Before she passed, there was so much negativity around the name; it wasn’t about the music anymore. People had forgotten how great she was. They let all the personal things about her life outweigh why they fell in love with her in the first place.”


I think that is a really beautiful thing to say about Whitney – that things occurred in Whitney’s personal life ended up getting plastered all over the tabloids. It’s like some forgot how talented she was … she was a human being that had issues, deep issues. But that doesn’t take her talent away!


So, yeah … anyway, following her passing, according to a blog by Safe Estates Law Group in Tennessee, it was discovered that Whitney left a Last Will and Testament, but it had not been updated since 1993. Thankfully, she did at least DO an estate plan following the birth of her daughter, Bobbi, so at least we were not working with nothin’. So, under Whitney’s Will, she left her estate to her daughter, Bobbi, in a Trust which stated that once she hit 21, she would receive 10% of the Trust; then at 25, she’d receive another distribution, specifically 1/6 of the Trust (which is weird amount, right?!); and the remaining Trust would be distributed to her once Bobbi hit 30.


I love to see what Whitney did in her Will – that, she thought about staggering out her daughter’s inheritance. I do this all the time for clients. I always say, “I know what Jenny would have done with money at 18, or 21, etc.” While I was a good kiddo, I just didn’t truly understand what a dollar meant at that age. I would say most kiddos don’t, to be honest.


In an unfortunate, tragic, and completely surprising turn of events, Whitney’s daughter, Bobbi, passed away in 2015 – at the way-too-young age of 22. What’s so crazy and so sad is that Bobbi eerily passed away in a similar setting as Whitney. Bobbi was found unconscious in her bathtub and sadly, she was in a medically-induced coma for nearly seven-flipping-months before she died.


With this happening, people have started wondering and asking, “Okay, so who gets Whitney’s Estate then?” According to Thompson McMullan, a law firm in Virginia, the only way to answer this question is to break the Estate in, like, two parts. This is what I mean by that – because Whitney’s daughter, Bobbi, was beyond the age of the first distribution (when she hit 21 and would have been entitled to 10% of Whitney’s Estate), that portion that Bobbi received depends on whether if Bobbi herself had a Will. If not, it’d go to her “closest heirs” – meaning either her father, Bobby (with a Y) Brown, or perhaps her partner, Nick Gordon. That brings up a weird issue though…


Nick Gordon and Whitney’s daughter, Bobbi, referred to each other as “husband and wife” but unless Nick can provide that they were legally and officially married (which most people do not believe is this case), Nick really has no standing – and everything would likely go to Bobbi’s father, Bobby with a Y. Though, because we live in such a litigious society, it’s possibly that Nick pushes the issue, tries to make a claim on Bobbi’s Estate, and perhaps receives some sort of settlement. Who knows! There was even some whispers that Nick possibly had a role in Bobbi’s passing – and if that can be proven, he probably won’t receive anything at all, including a settlement.


When I referred to a second ago about “who gets what in Whitney’s Estate” being split in two parts – we’ve got the part we just talked about that was distributed out to her daughter, Bobbi. The other part, however, is the estate assets that were still being held in trust for Bobbi, but had not been distributed out. According to that same Thompson McMullan blog post, that “part” is estimated to be around $18M. Whitney’s Will stipulated that if daughter died unmarried and had no children, the remainder of Whitney’s estate would go to Whitney’s two brothers, Michael Houston and Gary Garland, and Whitney’s mother, Cissy Houston.


Beyond the issue of “who” is getting “what” there were other issues going on too. Like we have talked about in past episodes, IRS gets a little …. Right up in celebrity’s business, it seems. I think this happened to maybe Prince’s estate and/or Michael Jackson’s estate – I’m pretty sure Aretha Franklin’s estate, too … anyway, according to the Safe Estates blog, the IRS challenged the value of Whitney’s Estate in May 2016. Specifically, the IRS challenged the value of Whitney’s royalties, residuals, and image. So again, like Prince and all them, we’re talking about that “intellectual property” idea – and how much it is worth. So, the IRS wants to be paid an additional $11M in taxes and penalties from Whitney’s estate. The estate, of course, disagrees with the IRS’ position.


You know, reflecting on Whitney’s estate plan, it sure could have been worse – but it sure could have been better too. I don’t think I can summarize it any better than Thompson McMullan’s blog post did. They said:


Some have suggested that Whitney Houston’s estate planning could have been better. Houston’s Will set up what is known as a ‘testamentary trust’ for her daughter. This is a Trust created by a Will – meaning that it does not avoid the need for probate and it becomes a public document. Houston could have accomplished the same goals through a ‘living trust” which could have kept the provisions of the trust private because it would pass outside of probate.”


Yup. Agree with whoever wrote that blog post for you, Thompson McMullan!


Sadly, because of all these issues, Whitney’s estate is still going on. For example, as I was doing my research for this episode, I stumbled upon an article that said it was released “51 minutes ago” (from when I was doing my research – not right now!) and it was talking about how a song was discovered by Whitney that was never released. The article explained that the song was written by her when she was a mere 17 years ago! Anyway, the estate sold the song on December 14th, 2021 at auction for $1M. So, that, of course, will be flowing through the estate – so things are STILL very much going on nearly ten years later, because remember Whitney died in 2012.


Or, say like a few months ago, in October 2021, Whitney’s estate announced a collaboration with MAC cosmetics – Pat Houston, again that was the individual appointed as the estate’s executor (but Pat was the sister-in-law and manager of Whitney), said the following talking about the announced collaboration:


The idea that is coming to fruition now is something Whitney always wanted to do. I’m pleased we can do something that I know she would have loved. We are just starting on this collaboration but exciting things are coming!”


But what you should really understand about this announcement is that this collaboration, too, will yield money flowing into the estate … again, almost 10 years after Whitney passed away. Shew-wee! A lot of moving parts, I tell you.


Alrighty, let’s wrap this episode up, shall we?


So, next week’s topic is a cautionary tale – a real-life case I, or my office, have personally worked on. Tune in next Tuesday to for a new episode!


Until then, Legal Tea Listeners…take care and be well!


Sources:


https://en.wikipedia.org/wiki/Whitney_Houston

http://www.safeestateslawgroup.com/whitney-houstons-estate-plan/

https://www.t-mlaw.com/commentary/elder-law-estate-planning-and-family-formation/who-will-inherit-whitney-houstons-fortune-following-bobbi-kristinas-death-and-what-are-the-lessons/

https://www.nytimes.com/2019/05/20/business/media/whitney-houston-hologram-album.html

https://americansongwriter.com/unearthed-whitney-houston-song-nft-sells-for-1-million/

https://news.yahoo.com/something-whitney-always-wanted-whitney-000000884.html

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