Whitney Houston Denies She’s Broke; Wins Lawsuit Vs. Step-Mom

Whitney Houston Denies She’s Broke; Wins Lawsuit Vs. Step-Mom

Celebrity gossip websites ran a story last week claiming that Whitney Houston is “broke as a joke.”  They even quoted an unnamed (of course) source claiming that Whitney would be homeless if not for the generosity of friends.  She called someone to ask for $100, the story goes.  If true, that would be quite a fall from financial grace for the singer who signed a $100 million record deal in 2001.

Whitney Houston wins lawsuit

Image via Wikipedia

Whitney’s camp quickly denied the rumors and says they are “false and ridiculous“.  Her rep points out that she just made a movie called Sparkle, with Jordin Sparks, and she didn’t work for free.

If Whitney is in need of money, she has another source she can pursue.  Don’t be surprised to see Whitney Houston foreclose on her step-mother’s home soon.

Why would Whitney Houston do that?  She recently claimed victory in the Federal Court of Appeals for the Third Circuit, in a sometimes-ugly lawsuit against the woman who married her father. That step-mother, Barbara Houston, had sued Whitney back in 2008.   When Whitney’s father, John, died in 2003, Whitney was received one million dollars as the beneficiary of a life insurance policy.

Barbara felt that money was really meant to benefit her.  Whitney had lent her father a great deal of money, some of it to buy a house that John lived in with Barbara.  When John Houston died, Barbara inherited the house.  Because of that particular loan, Whitney owned the mortgage on the house.

Barbara claimed the life insurance money was meant to repay Whitney for that mortgage. When Whitney refused to credit the life insurance money against the mortgage, Barbara sued.

Whitney was not pleased.  She counter-sued, pointing out in a public court record that Barbara met her father while she was a “custodial care service worker” (in other words, a “maid”), cleaning his house.  Barbara was 40 years younger than Whitney’s dad and starting dating him when he was still married to Whitney’s mother.  Whitney also brought up the fact that John and Barbara were married shortly after he divorced Whitney’s mother.

As part of this lawsuit, Whitney also sought a judgment for the mortgage to be repaid, with interest, which totaled about $1.6 million by then.

Barbara and her lawyers brought up several letters, written by various accountants.  They argued to the judge that these writings suggested the insurance policy really was meant to repay the mortgage.  The problem was that there never was a written agreement between John and Whitney Houston documenting this, and everyone from Whitney’s camp denied they had an agreement. Instead, Whitney pointed out that she lent her father lots of money, and this insurance policy meant to repay other loans, not the mortgage money.

The Judge agreed with Whitney and dismissed the lawsuit, without holding a trial, in late 2010.  Barbara filed an appeal. Late last month, the Federal Court of Appeals dismissed the appeal and upheld Whitney’s victory.  This ruling clears the way for Whitney to proceed with foreclosing on the house.

Given the obvious disdain Whitney has for Barbara Houston, as made evident in the lawsuit, the foreclosure will likely follow, paving the way for Whitney to own the house and kick Barbara to the curb.

At least this would give Whitney someplace to live, if those “broke as a joke” rumors are true.

Yes, this family feud turned ugly.  It’s not uncommon when someone dies with a newer spouse and adult children from a prior relationship.  In these families, the proper legal planning is more important than ever.

Clearly, John Houston intended the life insurance money to repay Whitney for money she lent him.  But what money?  No one knows for certain … although it’s interesting that one of Whitney’s accountants actually credited the life insurance money against the mortgage after John died, before later reversing the credit.  Other writings supported Barbara’s claim that this was what John intended all along.  But none of those writings were signed by John or Whitney, so the confusion remained.

The best way for most people to prevent confusion like this from sparking family fights after someone dies is good estate planning, including a will and trust that clearly and completely document the person’s wishes.  Life insurance goes hand in hand with this planning, and beneficiary designations should be coordinated with the estate planning documents.  Without proper estate planning making the intentions clear, court fights in second-marriage families are to be expected.

Don’t let this happen to your loved ones, or to your clients!  Encourage them to work with experienced estate planning professionals and put the right legal planning in place, before it is too late.

By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of the national television special, Trial & Heirs:  Protect Your Family Fortune! For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update.  You can “like” them on Facebook and follow them on Twitter.

Categories: Celebrities, Estate Battles, Estate Planning
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  • J2955

    Rest in Peace Whitney. You gave the world your all and now you’re safely home with God Our Father, His Son Jesus and Our Blessed Mother. We will always love you and remember you. jason and Family

  • J2955

    Rest in Peace Whitney. You gave the world your all and now you’re safely home with God Our Father, His Son Jesus and Our Blessed Mother. We will always love you and remember you. jason and Family

  • Anonymous

    Guess now the step mother will have to fight Bobbi ….

  • Anonymous

    Guess now the step mother will have to fight Bobbi ….

  • Kaitlyn

    Sounds like a motive

  • Kaitlyn

    Sounds like a motive

  • Tom

    Whitney…you left me with Great memories…it is so sad to lose such a beautiful person and wonderful talent so early in life…her music was my joy to connect with specially in moments of loneliness…may you rest in peace….

  • Tom

    Whitney…you left me with Great memories…it is so sad to lose such a beautiful person and wonderful talent so early in life…her music was my joy to connect with specially in moments of loneliness…may you rest in peace….

  • mrs pierre

    okay,stepmommy get to steppin in other words get the f–ck out

  • mrs pierre

    okay,stepmommy get to steppin in other words get the f–ck out

  • mrs. pierre

    whitney didn’t take on mess off of nobody,luv you whitney

  • mrs. pierre

    whitney didn’t take on mess off of nobody,luv you whitney

  • Anonymous

    Whitney, you had the voice of an angel and now you are a member in the choir of all choirs making the Lord smile with joy at the voice he had made. We will always love you. To the media leave her and her family alone. Enough is enough.

    • Marlene

      I feel the same as you. God has spoken, God has taken it is his will. So let Whitney rest in peace and her father and don’t make that the family in all their pain has to deal with our remarks based om nothing.

  • Anonymous

    Whitney, you had the voice of an angel and now you are a member in the choir of all choirs making the Lord smile with joy at the voice he had made. We will always love you. To the media leave her and her family alone. Enough is enough.

    • Marlene

      I feel the same as you. God has spoken, God has taken it is his will. So let Whitney rest in peace and her father and don’t make that the family in all their pain has to deal with our remarks based om nothing.

  • Anonymous

    Damn, this woman starts a relationship while the father is married.  Then is a maid on top of that and expects to live high on the hog!  Why do men allow a sideline wench to come up in the family and cause god awful situations just like this?  Then up and die and leave this kinda mess behind.  Which causes pain because of the very nature of their behavior and upheaval because of how things are left behind.  I’ve seen it too many times.   Women who have NOTHING of their own?!?!?  This is effin ludicrous! 

    And what kind of self respecting person thinks it is cool to try to get other people’s money?!?!?  I’m not down with OPP.  I’d have to sue the hell out of any such person trying to get money they didn’t work for.  Who would otherwise nearly be on skid row.  Crazy dingbat!  Just hope the law continues to prevail.

  • Anonymous

    Damn, this woman starts a relationship while the father is married.  Then is a maid on top of that and expects to live high on the hog!  Why do men allow a sideline wench to come up in the family and cause god awful situations just like this?  Then up and die and leave this kinda mess behind.  Which causes pain because of the very nature of their behavior and upheaval because of how things are left behind.  I’ve seen it too many times.   Women who have NOTHING of their own?!?!?  This is effin ludicrous! 

    And what kind of self respecting person thinks it is cool to try to get other people’s money?!?!?  I’m not down with OPP.  I’d have to sue the hell out of any such person trying to get money they didn’t work for.  Who would otherwise nearly be on skid row.  Crazy dingbat!  Just hope the law continues to prevail.

  • Ray

    Thank YOU GOD OUR FATHER for allowing the Grace of the voice YOU
    bestowed on us by giving us Whitney. Whitney one of THE GREATEST MOST BEAUTIFUL VOICES ALL TIME. RIP Whitney and be with GOD OUR FATHER and His SON THE LORD JESUS CHRIST FOREVER!