When Whitney Houston died in 2012, she left a will that had not been updated since 1993.  During the years in between, she experienced a divorce and other significant changes in her family and financial circumstances.  She did not update her estate plan.

Under the 1993 will, Whitney left most of her estate to a trust for her only child, Bobbi Kristina Brown.  When Bobbi Kristina reached age 21 in 2014, she received 10% of the trust; she was to receive another one-sixth of the trust at age 25 and the rest at age 30.  Bobbi Kristina died in 2015 at age 22, raising questions as to who would receive the rest of the trust and who would inherit Bobbi Kristina’s personal estate.   The royalties continue to pour in from Whitney’s music and films.

In May 2016, her estate challenged the IRS valuation of her royalties, residuals and image.  The IRS wants an additional $11 million in taxes and penalties.  The estate disagrees, feeling the IRS has been paid enough already.   How good was Whitney’s estate plan?  It was much better than no plan.  It was not as good as an updated plan that took into account Bobbi Kristina’s ability to handle money, the impact of a large amount of money on Bobbi Kristina and those around her, the legacy Whitney wanted to leave, and the estate tax and income tax consequences of her death.

The moral of the story:  update your estate plan as your family and financial circumstances change.  You would not expect your 20 year old car to work as well as a new car; don’t expect your 20 year old will to work as well as a new one.