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Horizon Elder Law & Estate Planning Blog

Monday, August 7, 2017

Learning From Philip Seymour Hoffman’s Estate Planning Mistakes

How can I protect my assets after my death?

Philip Seymour Hoffman was a celebrated actor who starred in such famous movies as The Hunger Games and Charlie Wilson’s War.  Hoffman’s talent on the big screen did not, however, equate to skill in estate planning.  Hoffman passed away in 2014 and was survived by his girlfriend and three young children.  He died with only a will drafted by his CPA in place that left his $35 million in assets to his girlfriend, who was to provide for his children.  His lack of an estate plan resulted in the loss of approximately $12 million in taxes.  Our San Ramon, California asset protection lawyers offer some estate planning lessons to be learned from actor Philip Seymour Hoffman.

Avoiding Lengthy Probate Delays

With just a will in place, all of Hoffman’s assets were forced to go through probate.  Probate can be a lengthy process.  The average probate in California, without any litigation, will take nine months to 1.5 years.  For large estates like Hoffman’s, probate will almost certainly take far longer.  During this time, your assets could be left in limbo and your heirs without the funds they need.

Had Hoffman instead set up a trust, his assets could have avoided probate and the delays that come with it. Those with larger estates or anyone who wants to save their heirs the time and confusion of the probate process should consider setting up a trust.  

Protecting Your Children with a Trust

Hoffman elected not to create a trust in part because he worried his children would become “trust fund children.”  The fallacy in this notion is as follows.  With just a will in place, the children will likely inherit their portion of the estate all at once at the age of 18.  This can be overwhelming for any young adult.  On the other hand, with a trust, you can set stringent limitations on the funds.  You can stagger the release of funds as the child ages and limit how funds can be used, thus protecting your children.

Minimizing or Eliminating Tax Penalties

Estate taxes can be tremendous.  In Hoffman’s case, his heirs lost about $12 million due to estate taxes because Hoffman was not married to his girlfriend and his substantial estate went through probate.  With thorough estate planning, you can protect your assets from significant tax penalties and ensure your funds go directly to your loved ones.


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