Posted by: Heinz Brisske
Lately, it seems that every time a celebrity dies, we have reason to shake our heads at the state of their estate. An article recently published online in DailyFinance.com suggests that Philip Seymour Hoffman made 3 big estate planning mistakes (the article doesn’t mention what “little” estate planning mistakes he made):
- He didn’t marry his honey;
- He failed to keep his plan up to date; and
- He put his family through an unnecessary public ordeal by not using a Revocable Living Trust.
Hoffman died with an estate estimated at approximately $35 million. Since he was not married, his estate will be unable to take advantage of the unlimited marital deduction, which could have saved some $12 million in estate taxes.
It seems that Hoffman executed a Will in 2004, wherein he provided for his son and left the balance of his estate to his longtime partner and the mother of his son. Though he subsequently had two daughters with his partner, those children were not mentioned in his Will, and there is now some question whether those children will be treated the same as his son. Undoubtedly, he would have wanted them to receive exactly what his son was to receive.
Finally, by doing his planning with a Will rather than use a Revocable Living Trust, Hoffman will subject his family to a public ordeal, since the Will requires probate, a public judicial proceeding. Had he used a Living Trust, the entire matter could have been kept out of the courts and thus out of the public eye.
Out attorneys constantly preach the use of Revocable Living Trusts and keeping estate plans up to date. You may not have an estate valued at $35 million, but the lessons to be learned are the same no matter the size of your estate. We can discuss tax-saving strategies with you (income tax, gift tax, estate tax and generation-skipping transfer tax), and help you plan your estate to minimize or avoid many or most of those taxes.
Be proactive. Anticipate issues before they become problems. And don’t wait: you can’t execute a plan after you’ve died.