Wednesday, July 26, 2017
Philip Seymour Hoffman was an incredibly talented actor. He earned a plethora of awards for his roles in movies like Capote and The Master. Unfortunately for Hoffman’s heirs, his acting talent did not transfer to estate planning. Hoffman cultivated an aversion to leaving money to his children in a trust, as he was wary of creating “trust fund kids.” To avoid this issue, Hoffman left his $35 million estate to his girlfriend, Mimi. Because the pair was not married at the time of Hoffman’s death, the estate is subject to probate and approximately $12 million in estate taxes. If Philip had married Mimi, the estate would have completely avoided the estate tax. Hoffman’s estate is also subject to additional probate costs and possible legal challenges from creditors. These avoidable costs may potentially cost the estate millions more in expenses. Advanced estate planning could have provided Hoffman’s estate with extensive tax savings.
See John M. Goralka, Philip Seymour Hoffman’s $12 Million Estate Planning Mistake, Kiplinger, July 2017.
Special thanks to Professor Jeffrey A. Cooper & Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.