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Estate of Actor Philip Seymour Hoffman to Be Settled Soon

Even on a financial level, it can take years for a large estate to settle—distributing property and resolving all of the executors' duties.

DownloadWealth Advisor’s article, “Posthumous Philip Seymour Hoffman Buzz Reveals: Big Estates Have A Life Of Their Own,” notes that for people like Hoffman, who accumulate recurring income or intellectual property, such as movie residuals, the probate process may keep going without actively liquidating those assets and obligations or winding them down, even when an estate plan is well done. For those that are not, lawsuits can last for decades.

Philip Seymour Hoffman left $35 million behind and wrote a will that assigned ownership of that wealth to his partner who’s also the mother of his children. That’s not a perfect solution, because they weren't married. As a result, his millions didn't pass to her tax-free. However, it’s still much better than no will at all, like the estate of the late rock musician Prince.

Hoffman didn’t ensure that his kids would inherit every asset legally permitted by the tax laws. He knew their mother would use the money care for them.

But these decisions have financial consequences. Hoffman’s estate didn’t receive the unlimited marital deduction which would have reduced the risk-free Treasury interest the family money could’ve generated from $1 million to $700,000 a year without touching the principal.

Unmarried partners are really hit hard with taxes in this situation. Hoffman’s estate paid a sizeable tax to pass on his wealth to his girlfriend. With current tax laws, she’ll pay again to pass it to the kids, reducing the ultimate inheritance by 65% in two steps. This will put a dent in possible current income.

Either way, with a $35M estate, Hoffman’s kids will be fine. However, for mega-millionaires, it makes a vast difference in terms of the lifestyle that the heirs can support. They should consider a deathbed marriage, if there's time. However, every family is different.

We offer FREE educational workshops all about elder law and estate planning.  Just click here today to reserve your seat now!

Jeff Bellomo, Esq.

 

Reference: Wealth Advisor (July 30, 2017) “Posthumous Philip Seymour Hoffman Buzz Reveals: Big Estates Have A Life Of Their Own”

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