- Wednesday, 10 January 2018 20:44
The estate of Whitney Houston settled its dispute with the IRS over outstanding estate taxes. The IRS had contended that the valuation of Houston’s back catalog and image and likeness was undervalued by $22 million resulting in $11 million of additional taxes. The settlement was for $2 million. Oddly, or perhaps not given the state of journalism in 2018, the focus of most articles was on the value of her image and likeness but the IRS and the estate differed on that valuation by only $200K.
A few small points:
1. Since the death of Michael Jackson, the IRS has been taxing the image and likeness of dead celebrities with the value based on expected licensing revenues in the future.
2. Cool fact – Robin Williams said that his likeness cannot be used for 40 years after his death rendering its value worthless.
3. In the age of streaming music, the longer the estate held out the less valuable the back catalog of albums became.
4. This was purely a principled, but unemotional, victory for the estate. Houston’s daughter died nearly 3 years ago and Houston was divorced. Any estate tax savings will benefit her mother and her brothers.
- Tuesday, 29 November 2016 08:22
A Bobbi Kristina Brown update. An Atlanta judge ruled two weeks ago that Nick Gordon, the boyfriend of Bobbi Kristina Brown, is liable for $36 million in damagesto her estate and to her father, Bobby Brown, for allegedly causing her death by providing her the drugs in her body at the time of her death and for assaulting her. The judge determined the amount of damages after Gordon stopped appearing in the case a year ago and the estate was awarded a default judgment (because Gordon stopped participating in the case) in September.
Only two points:
1. Gordon does not have the funds to pay the judgment and will likely declare bankruptcy to avoid paying them.
2. There is no word on when Bobby Brown will be held liable for providing drugs to, and ruining the career of, Whitney Houston.
- Tuesday, 24 March 2015 21:20
As news breaks that Bobbi Kristina Brown will be moved to a long term care facility, one wonders what will become of her estate. Or at least those of us in the estate planning field wonder. Her mother, Whitney Houston, left her reportedly $20 million estate in trust for Bobbi Kristina per the terms of her 1993 will. Bobbi Kristina should have received 10% of that on her 21st birthday last year under the terms of the trust. Bobbi Kristina’s assets will go to her closest living relatives i.e. her father, Bobby Brown. The remaining 90% of the trust will be distributed per the terms of Whitney’s will which means to her mother and her two brothers. Bobby Brown was also listed as a trust beneficiary, as was her father who died in 2003, but is precluded from inheriting from Whitney due to their 2007 divorce.
1. Whitney should have updated her will multiple times – as her daughter aged, after the death of her father in 2003, and after her divorce in 2007.
2. Distributing trust assets to a child at the age of 21 is a bad idea. I never draft a trust that permits a distribution prior to age 25. I also have a clause prohibiting distributions to beneficiaries suffering from drug use, alcohol abuse, or a gambling problem.
3. Recreational drug use is expensive. In an age where Lou Reed’s estate was valued at $20 million primarily based on one song (“Walk on the Wild Side”), a $20 million estate seems small for an artist of Whitney’s stature recording in an era of larger royalties and multi-platinum CDs, with a film career to boot. Not that Lou Reed did not do drugs.