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Lessons From Philip Seymour Hoffman's Will
From the gift officer's perspective, the circumstances surrounding Phillip Seymour Hoffman's will offer a good chance to revisit our Don’t Assume Anything policy.
In our guided learning courses, we continually stress that we cannot assume that donors know the tax advantages of charitable giving.
A recent Forbes.com piece about Phillip Seymour Hoffman's estate offers this reminder again, albeit for a different reason: It's never safe for us to assume that everyone wants to avoid paying taxes. According to the article, Mr. Hoffman seems to have had advisors who explained his options and urged him to set up trusts for his children, but he decided that paying significant estate taxes was preferable to his alternatives.
Here are a few things Hoffman did that were unusual for someone with his assets:
- He didn't get married to his longtime partner, Mimi O'Donnell (he didn't believe in it), which played a large role in the $15 million his estate will have to pay in taxes.
- He didn't update his will, and so only his first child is named, which means his other children will have their share of the estate determined by a judge in probate court.
- He didn't want to set up trust funds for his children, apparently because of concerns about trusts leading to spoiled and lazy children. "Hoffman obviously wanted his children to enjoy culture and fine arts, as he spelled out in his will. Why not set up limited trust funds so that the money would be used for those purposes only?"
- He either didn't know or didn't care that going through a will instead of a trust exposes the process to public scrutiny. A will has to pass through probate court before it can take effect. "That means, they are public record, more expensive and difficult to administer, and more likely to lead to family fighting. Philip Seymour Hoffman’s estate provides a great example of this. None of us would know the details of his estate, or to whom or how he wanted to pass his assets, if he used a proper trust instead of relying on a will."
The whole piece is well worth a look.
For more reading on this topic:
- Here's another story about what not to assume
- This explains the estate probate process in greater detail
- And here are some lessons from James Gandolfini's Will