Jennifer C. Rydberg, Attorney at Law
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Mistakes were made with Philip Seymour Hoffman's estate planning

Estate planning is sometimes the last thing Kent residents think about. After all, who wants to think about their death? It definitely is not a popular topic, but it is incredibly important. What happens to a person's lifetime of savings in the event of an individual's death is something that should be thoroughly and frequently analyzed. Philip Seymour Hoffman's estate planning is an example of how mistakes can be made.

Philip Seymour Hoffman passed away in 2014, leaving his entire $35 million estate to his girlfriend and their three young children. Because they were not married, approximately $12 million of that estate went to estate taxes. His will also stipulated that his children were to use his estate money to visit major metropolitan areas in order to gain appreciation for the arts. Because he used a will for his estate planning, it had to go through probate, which is resulting in additional costs and delays. There may also be additional costs for the children who may need to go to court every two years until they turn 18. At the age of 18 they receive the rest of their funds, which may not be a good idea for an 18 year old.

A trust would have been a better option for Hoffman's estate, keeping his finances private and protecting his girlfriend from creditors or a divorce if she marries again. Each of the children would have benefitted from a trust as well, as provisions could have been incorporated to pass on his values to his children. Funds distribution at certain ages could have been set up as well, which could have helped ensure the children receive the money when they are more financially mature.

A legal professional who is skilled in estate planning can run through the many different circumstances a family may face with their estate plan. Each family is unique, and what works for one may not be a good option for another. Estate planning is a way for a family to help preserve their assets and pass their values on to the next generation. It is a thoughtful process that helps a person legally ensure their legacy will endure.

Washington residents should know how important estate planning can be for anyone, regardless of where they are in life. An attorney can help make sure their wishes are followed while minimizing court costs, taxes, and other aggravating factors.

Source: Kiplinger, "Philip Seymour Hoffman's $12 million estate planning mistake", John M. Goralka, July 2017

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