image source: CBSNews.com
Estate planning can be tricky, and for celebrities with mega assets the stakes for heirs are enormous. You might think that multi-millionaire celebrities would have their affairs in order, simply because of the team of experts they can afford to hire. However, it seems that for whatever reason, mistakes are often made and when they are, the tabloids have a field day. That seems to be exactly what has happened after the death of actor Philip Seymour Hoffman.
Divorces, remarriages, and the birth of children after a will is drawn up can all disrupt an estate plan (although a good estate planning attorney should address the birth of additional children ahead of time.) What makes things even trickier is that laws differ from state to state, and Congress loves to change the estate tax laws on a regular basis. Even if all the legal documents are up-to-date, life insurance and retirement plan beneficiaries are often forgotten, leaving someone left behind with a smaller piece of the financial pie.
In Hoffman’s case–whose estate is estimated as worth $35 million–his daughters born after a will is drawn up were left out.
Hoffman’s mistake was not updating his will which was written in 2004. The will left all of his estate to his partner, Mimi O’Donnell, and gave her the option of turning down the inheritance and placing it in a trust. The catch is that because the will only mentioned Hoffman’s son, his daughters might not share in the estate. The tangled New York laws governing estates will likely lead to a long battle to get the two girls their due.
The actor’s mistake should be a reminder to all of us to seek competent help early and often. By hiring a Personal CFO, you have someone to ask what changes to your life need a rewrite of your estate documents, and which ones do not.
