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What can we learn from renowned actor's estate planning mistakes?

Most of our readers remember the actor Philip Seymour Hoffman. Even if you don't recognize his name, you likely saw him in one of the many movies he did, including "Hunger Games," "Doubt," "Charlie Wilson's War" and "Capote." Hoffman died in 2014 of a fatal mixture of drugs. The Oscar-winning actor was found with a syringe still in his arm.

Hoffman had done some planning for his $35 million estate. He reportedly had a certified public accountant draft his will. In it, he left all of his money to his girlfriend to care for the couple's three children. He did not want to put his children's money in trusts because he didn't want them to be "trust fund kids." However, his will did stipulate that he wanted them to have access to the arts and other cultural opportunities available in major metropolitan cities.

As one California estate planning attorney notes, however, he could have saved his loved ones a considerable amount of money and potential conflicts had he done things differently. Most people don't have multimillion estates when they die. However, there are lessons to be learned from Hoffman's estate planning.

If Hoffman and his girlfriend had married, according to the attorney, he would have saved her about $12 million in estate taxes. Of course, marriage isn't for everyone. However, he could have provided for her with a personal asset trust. That would have helped protect her from potential lawsuits and claims by others against his estate as well as estate taxes paid by her survivors when she dies.

He could also have provided the same protection for his children via trusts. If you don't want your children to inherit considerable wealth before they're mature enough to handle it, you can designate how much will be given to them at specific ages, going well into adulthood.

No matter what size your estate is, why give a portion of it to the government via estate taxes, income taxes and probate costs if you don't have to? It's important to sit down with an experienced California estate planning attorney to discuss your wishes for your spouse, children and other loved ones as well as the legacy that you want to leave. He or she can work with you to draft an estate plan that will help you do that.

Source: Kiplinger, "Philip Seymour Hoffman’s $12 Million Estate Planning Mistake," John M..Goralka, accessed July 26, 2017

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