Over the last several years, there have been several examples of high-profile celebrities who died without doing any estate planning at all, or whose planning was grossly insufficient when viewed through the rear-view mirror. One example of the latter was well-known actor Philip Seymour Hoffman, who died unexpectedly in 2014.
What Went Wrong
Rather than create a trust instrument as part of his estate plan, Hoffman’s assets passed through a will. This meant those assets were subject to probate court, which can be expensive, time-consuming and frustrating – even for estates significantly smaller than Hoffman’s.
When all was said and done, Hoffman’s estate faced an estate tax obligation of approximately $12 million. In addition, his plan for distributing assets to his three children with his girlfriend, Mimi, was to leave the entire estate to her with stipulations that funds be used for the children for specific purposes.
How Could Things Have Been Handled Differently?
From a tax standpoint, had Hoffman married his girlfriend, his estate could have potentially had zero estate tax liability. That’s because the law provides for an unlimited marital exemption when assets are passed to a surviving spouse.
The need for probate court could have been avoided entirely, had Hoffman created and funded a revocable living trust rather than simply relying on a will. In addition, by crafting provisions in a revocable trust to provide for their children – including incentive provisions and protections designed to provide guard rails around how trust assets could be used, he could have ensured that his wishes and goals would have been carried out.
Don’t Wait – Update Your Estate Planning Documents Now
Hoffman’s last will and testament was dated in 2004 – nearly ten years before his death, and before he acted in some of his best-known roles. If he had met with an estate planning attorney every few years to review and adjust his estate plan, his estate settlement might have been handled very differently, with significantly lower taxes and fees.
If you have been considering having your estate planning documents created or revised, there is no better time than the present. No matter what your estate planning requirements may be, we are here for you. We will carefully listen to you to create an estate plan that meets your wishes and needs.
Our team of experts has the experience and ability to tailor a comprehensive estate plan for you. After a thorough review of your assets we will present you with various estate planning techniques that will suit your needs no matter what type of estate you have. Contact us today to get started!