Oscar-winning actor Philip Seymour Hoffman’s will has been filed for probate. This provides yet another cautionary tale when it comes to estate planning mistakes.
Read below to learn what you can do right away to make sure that your family and your wealth are protected.
Four things you can learn from Philip Seymour Hoffman’s estate plan:
1. 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. Now, we all know that his son will inherit everything when he turns 30 and we’ll also know the total size of his estate when it’s inventoried and filed with the Court, as it must be.
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.
2. Update your plan.
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.
After born children are provided for by law, but Hoffman lost out on the opportunity to specifically direct their interests.
3. Protect the assets.
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. All assets will be distributed to Cooper outright at that time.
Instead, Hoffman could have created a Lifetime Asset Protection Trust that would have kept Cooper’s inheritance safe from divorce, creditors, lawsuits and bankruptcy forever PLUS provided incentive to Cooper to grow the assets of the trust rather than squander them.
4. Use tax-saving strategies in your estate plan.
Since Hoffman was not married to his long-time companion, there will be a monster sized estate tax bill to pay.
The use of other tax-advantaged estate planning strategies like an Irrevocable Life Insurance Trust (ILIT) would have preserved assets and resulted in more money to Hoffman’s family and less to the US Government.
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