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Philip Seymour Hoffman's will may be a financial mistake

Florida residents may remember the Oscar-winning actor Philip Seymour Hoffman, who was found dead in February. Now, people with knowledge of his estate are suggesting that its structure may not have been the best possible one from a financial standpoint.

The star reportedly left only a long-standing trust for his first child and a will that was written at least ten years ago. Unlike many celebrities, this means that Hoffman's bequests will be public record. It seems that except for the aforementioned trust, the actor's entire estate, which is estimated to be at least $35 million, was left to his long-time companion. Because of this, it is likely that the estate tax bill on the bequest will be almost $12 million.

Aside from the taxes, another potential problem with the estate has been raised. Hoffman has two younger children who were not included in the oldest child's trust and do not appear to be specifically provided for in the will. It is possible they could be provided for due to state law that protects later-born children when an older child is provided for, but the situation could have been handled much more efficiently and with more certainty that the younger children would inherit.

This is an example of why Floridians need to consider various types of estate plans and not rely solely on a will in all cases. Setting up several trusts could have, in Hoffman's case, done several things. First, the specifics of his estate could have remained private, instead of being gawked at by the world at large. Second, he could have potentially minimized or all but eliminated the estate tax liability on the bequests. Third, he could have protected his younger children from being disinherited in case they had a falling out with their mother or she were to get married and leave her estate to her new husband.

It is important that people, whether rich and famous or not, have specific goals in mind when planning their future and explore all the avenues available under the law to reach those goals. That way, individuals can have the peace of mind knowing that their loved ones will have some protection when the time comes to leave this life.

Source: TODAY.com, "Why Philip Seymour Hoffman's will is 'a mess'," Kelley Holland, Feb. 21, 2014

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