Oscar-winning actor Philip Seymour Hoffman’s will has been filed for probate and provides a cautionary tale when it comes to estate planning mistakes. Here are four things he could have done to correct them:
Create a Revocable Living Trust. Hoffman was a public figure who valued his privacy. Yet by creating a will instead of a revocable living trust, he let the world in on his private life. A will is public record, so every detail is available to anyone interested enough to look it up. A revocable living trust would have allowed him to keep his private wishes private.
Update your will. Hoffman created his will in 2004 and never updated it, so his two youngest daughters are not mentioned or provided for in the will. His estate has been valued at $35 million, and his executor is his long-time companion who is also the mother of their three children. No doubt she will provide for all the children, but not including all your heirs could prove to be a fiasco.
Strive for balance in trust administration. While Hoffman did create a trust for his son Cooper, naming Cooper’s mother as sole trustee, that trust will dissolve once Cooper turns 30. Naming someone to serve as an impartial co-trustee and creating a lifetime trust to distribute funds throughout Cooper’s life would have provided better protection for the inheritance from creditors, spendthrift habits or spouses.
Use tax-saving strategies in your estate plan. Since Hoffman was not married to his long-time companion, there will be a big estate tax bill to pay, both state and federal. The use of other tax-advantaged estate planning strategies like an Irrevocable Life Insurance Trust (ILIT) would have preserved assets and resulted in a larger inheritance for Hoffman’s children.
The Flanigan Law Group provides estate planning, administration and litigation legal services. For more information on California wills and probate, contact our Irvine law firm at 949-450-0041.