Americans are still mourning the loss of actor Philip Seymour Hoffman, who died of a drug overdose in February of this year. Not only was Hoffman considered one of the greatest modern actors, he also seemed to be a success story of overcoming addiction. He had been clean and sober for more than 20 years before relapsing in the final year of his life.
Philip Seymour Hoffman’s death also came with financial implications for his long-time girlfriend and their three children. Most have been quick to note his apparent estate planning mistakes, which will likely result in steep estate taxes and a reduced inheritance for his family. In recent weeks, however, it has been revealed that Hoffman’s “mistakes” were actually intentional choices.
According to the attorney who was appointed as guardian of his children, Philip Seymour Hoffman regarded his long-time girlfriend as a spouse, but he “simply did not believe in marriage.” Because they were not married, she was not able to take advantage of spousal inheritance benefits afforded by the government.
Hoffman also had no trust fund(s) in place for his children, which also seems to have been intentional. The appointed guardian said that Hoffman’s accountant suggested trust funds many times, but the actor did not want his children to grow up as or to be thought of as “trust fund kids.” Presumably, he wanted to avoid labels like “spoiled,” “entitled” and “lacking ambition.”
Mr. Hoffman’s estate was worth an estimated $35 million when he died. Even though his estate planning choices likely resulted in significantly higher taxes and other negative consequences, his family will seemingly have the money they need to be taken care of.
His choices were not ones that are right for every family. However, everyone should have the option to choose. Because we never know what the future will hold, it is important to handle estate planning decisions sooner rather than later.
Source: New York Daily News, “Philip Seymour Hoffman did not want his children to become ‘trust fund kids’: attorney,” Barbara Ross, July 21, 2014