Estate Planning Lessons From the Rich and Famous
August 2019

Whitney Houston died on February 11, 2012, leaving everything to her daughter Bobbi Kristina Brown in a trust that provided that Brown was to receive ten percent of the trust principal at age 21, twenty-five percent at age 25, and the remainder at age 30, at which time the trust would be terminated. Should Brown die before age 30, the trust provided that Houston’s mother and two brothers would inherit the remainder. Brown was 18 when her mother died, and she died four years later, at age 22. Because Brown was a legal adult at the time of Houston’s death, had Houston not used a trust, Brown would have inherited all of her mother’s money outright. When Brown died, the money would have passed according to Brown’s will. If Brown had died “intestate” (without a will, which, given her age, is likely), the money would have passed according to state intestacy laws. In that case, Brown’s father--Houston’s ex-husband--Bobbi Brown would probably have inherit-ed all of the money, as he was Brown’s closest living relative at the time of her death. By using a trust, Houston was able to control the timing of the distributions, as well as the ultimate disposi-tion of her fortune. A trust is a legal arrangement among three parties: the grantor (the person who creates the agree-ment and transfers property into the trust), the trustee (the person who manages the property in the trust), and the beneficiary (the person or entity who receives the benefits of the trust proper-ty). Principal refers to the property owned by the trust, and income is the money generated by the principal. The trust document names both the trustee and the beneficiary, and provides instruc-tions to the trustee as to how and when to distribute trust income and principal to the beneficiary. Trusts can be very flexible; there are many different types, and they can be drafted to reflect and give effect to your wishes. When David Bowie died on January 10, 2016, he left an estate worth approximately $100 mil-lion. At the time of his death, Bowie was married to Iman and their daughter Alexandria (Lexi) was 15. Bowie also had an adult son, Duncan, from a prior marriage. Iman has an adult daughter, Zulekha, from a prior marriage. Bowie left most of his estate in three trusts: 50% in trust for Iman, 25% to Duncan, and 25% in trust for Lexi. The trust for Iman provided that she was to receive income during her lifetime, but upon her death, the remaining principal would go to Duncan and Lexi. Had Bowie left Iman’s share to her outright, it would be hers to do with as she decided. In that case, she could leave it to her children and exclude Duncan. Bowie structured the trust to avoid this possibility; when Iman dies, the remainder of the trust will go to his children. Over 225 years ago, Benjamin Franklin famously wrote, “In this world nothing can be said to be certain, except death and taxes.” None of us likes to think about, let alone plan for, the day we will no longer be here; however, it is a fate for which we are all destined. A little forethought and planning today can save your loved ones a great deal of time, energy, and money down the road. Please be sure to take some time to review your estate planning documents regularly and have them updated, if necessary, to make sure they reflect your current wishes. IMPORTANT DISCLOSURE INFORMATION Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pathway Financial Advisors, LLC-“Pathway”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Pathway. Please remember that if you are a Pathway client, it remains your responsibility to advise Pathway, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Pathway is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Pathway’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note : Pathway does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Pathway’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

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Estate Planning Lessons From the Rich and Famous
August 2019

Financial planning for life

Your best interests. Our first priority.

An expert team

Helping you create a successful future

Our sole purpose is to be your trusted advisor.

We work with our clients to identify opportunities, limit financial risks, minimize tax liabilities, and plan a lifetime financial strategy.

We work out of offices in...

Fee-only, individualized service suits our diverse clientele.

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Estate Planning Lessons From the Rich and Famous August 2019

Estate Planning Lessons From the Rich and Famous
August 2019