Many individuals fail to engage in estate planning so those who do should be commended. But the process should not end when those documents are signed. Regardless of whether New Jersey law applies or that of another state, events may occur in a family that requires an update to an estate plan. The recent death of Whitney Houston and its effect on the inheritance of her only child is an example.
Houston's will was signed in 1993 with her daughter Bobbi Kristina her only heir. Houston's family and financial circumstances were very different then than at the time of her death almost 20 years later. When she died this year, she was no longer married to Bobbi Kristina's father Bobby Brown, and her net worth had substantially increased.
Houston's mother and sister-in-law have filed a petition with the court to change the terms of the will to protect Bobbi Kristina, who is now 19. As it currently stands, Houston's daughter would inherit 10 percent of the estate in about two years, when she turns 21. Another distribution of one-sixth of the estate would be made when she is 25, with the balance being distributed to her at age 30. By then, the amount of the estate will likely have increased significantly as royalties accrue.
The petition is based on the belief that Bobbi Kristina will be a target of undue influence when she starts to receive the millions, even in small pay-outs. But some factors work against the changes being requested. Whitney did sign a codicil to her will in 2000 changing only the trustees, not the amounts or schedule of distributions. The court may determine that Houston let her estate go without changes for 20 years and that the one change she did make did not affect the changes sought by her relatives.
While Whitney Houston's case involves an inheritance of millions of dollars and celebrity news fodder, many families in New Jersey will experience marriage and divorce, births and deaths, and any number of other circumstances that affect family dynamics. When these events occur, the result can be an unintentional change to the family's entire estate plan. Making an estate plan is certainly a smart first step, but revisiting your decisions on a regular basis could prove to be worth the effort.
Source: Forbes, "Whitney Houston's Family Doesn't Trust Bobbi Kristina's Ability To Handle Money," Danielle and Andy Mayoras, Oct. 2, 2012