The Huffington Post: Whitney Houston Leaves Stepmom In The Cold: Excerpt
From 'Trial & Heirs'
The following is an
excerpt from the book "Trial & Heirs" by Andrew and Danielle Mayoras.
Whitney Houston is no stranger to family fights in court. In 2002, the
entertainment company owned by her father, John Houston, sued her. John
Houston said publicly that his company was owed $100 million and he expected
his daughter to repay it. He died in February of 2003, and the case was
dismissed not long thereafter. Reportedly, Whitney Houston did not attend
her father's funeral service or burial.
John's wife, Barbara, filed her own lawsuit against Whitney in December of
2008. Whitney was the sole beneficiary of a $1 million life insurance policy
of her late father.
Barbara Houston claims that Whitney had agreed with her father that the
money would be used to pay off a mortgage that Whitney held over John and
Barbara Houston's home. Apparently, Whitney lent her father $723,000 in 1990
and this loan was secured by a mortgage against his house, payable to
Barbara's lawsuit alleges that the life insurance was purchased to pay off
this mortgage, and the remaining balance was to be turned over to Barbara.
Apparently, even though five years had passed since John Houston died,
Whitney never gave any money to Barbara. Barbara also says in her lawsuit
that Whitney did not even release the mortgage. So did Whitney give in? We
all know she has plenty of money already, right?
Heck No! Instead, Whitney filed a counterclaim. She claimed the life
insurance was intended to repay Whitney for other money she had lent her
father, not payoff the mortgage. To top it off, Whitney also counter-sued
her late father's wife to force her to repay the mortgage. And she even
wanted interest on the mortgage... $1.6 million in total.
But there was an encore to the fireworks! Whitney decided to use the
countersuit as a prime opportunity to slam her "stepmother." She pointed out
that Barbara was 40 years younger than her father, how she dated her father
for three years before the divorce from Whitney's mother, and how Barbara
met John as a maid cleaning his house. Remember, lawsuits are public record,
so Whitney knew that airing all of this dirty laundry would be in public.
So who is telling the
truth? Did John Houston really want Whitney to keep the money as a repayment
for other money owed, or had he trusted Whitney to pay off the mortgage and
give the rest of the money to Barbara?
The problem is, we don't know. John shouldn't have relied on naming Whitney
as his life insurance beneficiary without an agreement or other writing
clarifying why he did so. Or, even better, he should have created a trust,
named it as a beneficiary of the insurance, and then his trust could have
directed exactly who should receive the money and why.
Instead of clearly documenting his intent, John took a shortcut. Now,
because of his shortcut, his wife and famous daughter are bearing their
nails and teeth at one another, in public.
Once again, this is an ongoing case. Be sure to visit TrialAndHeirs.com to
keep up with Whitney and Barbara's next moves.
Who is named as the beneficiary of your life insurance, IRA or annuity?
Avoid a family fight!
Never, ever name someone as a beneficiary of your life insurance policy
unless you want that person to keep the money. It's not worth leaving it up
to faith and trust. If the life insurance has significant value (which most
life insurance policies do), create a trust, and name the trust as your
beneficiary on the insurance policy. Then you can dictate exactly how the
money is to be split, and under what conditions.
Once you die, the beneficiary of your insurance can claim the money
immediately, without notifying anyone else and without going through probate
court. If the rest of your family has to start a lawsuit to get the money
back, they have to sue right away or the beneficiary can collect (and spend)
the money before anyone else even knows it's gone. In Whitney's case, she
has the assets to repay the $1 million if a court orders her to do so. But
in most families, this is not the case. Whenever families fight over who
really should have the insurance proceeds, they have no choice but to file
lawsuits quickly before the money is gone.
5 JANUARY 2010