Many in New Jersey are aware of the body of work of the late Philip Seymour Hoffman. The award-winning actor died earlier this year at the early age of just 46. Unfortunately, he seems to have made several serious estate planning errors, leaving his three children at risk of failing to receive anything from the actors estimated $35 million estate. Regardless of one’s level of wealth or lack of fame, there are important lessons to be learned by his example.
To begin, Hoffman drafted his will in 2004, which is prior to the birth of two of his children. He did not create an updated will from that point forward. This leaves his younger children in a tenuous legal position in regard to any right to gain from their father’s estate. In the state of his residence, children born after a will is drafted can pursue benefits, but only if they were not otherwise provided for. If it is revealed that Hoffman set up any other accounts or investments for them, their ability to access anything from his estate could be limited.
Within his will, Hoffman left virtually everything to his companion and the mother of his three children. Should she remarry, the children could end up with nothing. In addition, unless she dies within a short period of time after Hoffman’s death, any assets that remain will be subject to taxation as part of both her estate and that of Hoffman. Both of these negative scenarios could have been prevented by the creation of a trust.
As this example shows, it is easy to make estate planning errors, even when one is rich and famous. The failure to update one’s will and review estate planning provisions is a common error. In addition, many New Jersey residents would benefit from the creation of a trust, which not only helps to ensure that assets go to the proper beneficiaries, but bring significant tax benefits, as well.
Source: Cardiology Today, “Learn from celebrity estate planning misfortunes“, Ken Rudzinski, May 15, 2014