Whitney Houston's will has been discussed a lot this week. How will the late singer's assets be doled out to her daughter Bobbi Kristina? And just how do trusts work anyway?
A judge in Atlanta validated Whitney Houston's "Last Will and Testament," a 19-page document that leaves everything to her daughter, the gossip website TMZ reports.
Whitney Houston's money will go into a trust for Bobbi Kristina, 19, who won't see any of it until she turns 21, according to Inside Edition.
So how exactly does a trust like this work?
A trust created by a will -- called a testamentary trust -- is one way to direct the division of property, usually money, after a person's death. To create a testamentary trust, a person's will must name at least one beneficiary who will receive payments from the trust, and a trustee who will manage the trust.
The will maker can set up her testamentary trust according to her own wishes. Whitney Houston's will, for example, calls for Bobbi Kristina to receive her first trust payout when she turns 21, another payout when she turns 25, and the remainder of the trust's assets when she turns 30, Inside Edition reports.
Trusts can be set up in other ways as well:
- A charitable trust names a charity, or the public in general, as beneficiary.
- A special needs trust can provide for the long-term care of a disabled person.
- A spendthrift trust gives a trustee full authority to spend or invest a trust's assets, but the trustee's actions must be for the benefit of the beneficiaries.
All the while, the trustee must live up to her duty to faithfully oversee the trust. If a trustee fails to do so -- for example, if she pockets the money for herself, or makes reckless investments in a spendthrift trust -- she can be held personally liable to the beneficiary for any damages.
If you're thinking of setting up a testamentary trust like Whitney Houston did in her will, it may be wise to consult a trusts attorney about the best type of trust for your situation.
- Whitney Houston's Will Revealed (Inside Edition)
- Trusts: An Overview (FindLaw)
- Browse Trusts Lawyers by Location (FindLaw)
- Whitney Houston's Death Provides Estate Planning Lessons (FindLaw's Law and Daily Life)