Regardless of the size of their estate, most people in Georgia want to ensure that it is divided according to their wishes. One way to ensure that this happens, while protecting the overall value of the estate, is through the creation of trusts. Some professionals argue that the case of Philip Seymour Hoffman is an example of the potential pitfalls of leaving estate distribution to a will alone.
Reports indicate that Hoffman did not want his three children to be “trust fund kids.” As a result, he used a will to leave his entire estate to his girlfriend, the mother of his children. The expectation was that she would ensure that the children were provided for.
However, a will must go through the probate process, which can take a year or longer to complete for the average estate. For an estate as complicated as Hoffman’s, it can take even longer. Additionally, almost $12 million of the estate went to taxes.
A trust would have allowed the estate to avoid the loss of assets through taxes as well as protecting it from claims against Hoffman’s girlfriend or in the event she marries and divorces. A trust can also contain certain provisions. For example, Hoffman wanted his children to live near or visit metropolitan areas so that they have many different cultural opportunities as well as exposure to art — a desire that could have been provided for in estate planning documents.
While a will is an essential document when it comes to estate planning, it does not always meet the needs of an estate holder, including providing provisions regarding when and how money will be dispersed. Trusts can help people in Georgia avoid certain taxes that could take a toll on an estate, among other benefits. An estate planning professional can help those going through the process understand what tools will best meet their needs.
Source: kiplinger.com, “Philip Seymour Hoffman’s $12 Million Estate Planning Mistake“, John M. Goralka, July 21, 2017