Sarah Stewart Legal Group, PLLC

Caring, Honest, Solutions to Your Legal Needs at Affordable Rates.

Month: July 2017

What We Can Learn from Philip Seymour Hoffman’s Estate Mistakes

By Sarah Stewart Legal Group

We all know Philip Seymour Hoffman.  He was the lovable actor who made appearances in many movies, including Twister, The Big Lebowski, Capote, and the Hunger Games movie series.  His death in 2014 was a tragic end to an acclaimed life. Unfortunately, like many stars before and after him, Hoffman made some disastrous estate planning mistakes.  Today, we will learn from him.

Hoffman died with a $35 million estate.  His girlfriend and their 3 children survived the actor. Hoffman chose a Last Will and Testament as his estate plan for his family, due to his stigma against trusts. He was determined that his children would make their own way in the world and not become “trust fund babies.”

Hoffman’s stigma and choice led to his estate owing $12 million in taxes.  Had Hoffman chosen to marry his girlfriend, or used appropriate estate planning tools, he may have been able to save his family that $12 million.

Hoffman also demanded that certain funds be used for specific purposes for his children and their education, something that Representatives of Wills are not required to do by law. Only a trust requires the Trustee to follow your express restrictions as to when and how money will be used for heirs.

Hoffman’s choice of using a Will saddled his family with more costs, delays in receiving their funds, and allowed the proceedings to be public record. Courts take fees for every probate filed.  Attorneys take fees as well. Creditors must be notified of the death and are allowed to file claims for money.  Should the probate require additional work, such as selling property, there may be even more exceptional fees tacked on to the final bill.

Also, Hoffman’s children are still minors.  This means, given the large amount of his estate, the Court may require Guardians to be appointed to manage those funds.  The Guardians would likely be required to establish trusts for the children’s benefit so the funds are properly managed. In essence, Hoffman’s children may become “trust fund kids” regardless of his best intentions.

Hoffman’s choice left his estate open to his girlfriend’s creditors, possible new husband/boyfriend and future kids, as well as a possible second dip into the assets for a second round of estate taxes on his girlfriend’s death.  Trusts options would have allowed Hoffman to avoid all of these additional problems. Pre-planning your estate is vital for any estate, but large estates especially.

Estate planning, and trusts, provide so many different avenues to reach your planning goals.  Trusts can provide tax benefits, restrictions on how or when funds will be used, protect your heirs’ funds from their creditors and/or divorces, and other lawsuits.

Though Oklahoma has no estate tax, other states do.  If you live outside of Oklahoma, you will need to consider your state’s estate taxes as well as Federal estate taxes in your planning.

Reach out to a professional to help you plan your estate.  Don’t wind up making the same mistakes as some of our most famous and wealthiest stars.

5 Estate Planning Concerns for Single Parents

By Sarah Stewart Legal Group

For married couples, many decisions regarding who manages assets after death and makes medical decisions for their spouse can be relatively easy.  When a family involves a single parent, those questions can become more complicated.

Today we’ll discuss 5 concerns single parents should consider when making their estate plans.

(1) Who Will Take Care of the Kids?

Who would you want to take care of your minor children if you’re unable to?  If you are a divorced parent, the default will be the other parent, if that parent is living. If that parent dies before you, or for another reason is not in the children’s lives, you will need to choose someone you trust to care for your children.  If that person does not have the financial resources to take on an extra child or more, you may want to consider establishing a trust for the care of the children.  These trusts can be funded with life insurance proceeds, or any other assets you have.

(2) Are You Insured?

As a single parent, your financial responsibilities are greater than married families.  You carry the entire burden yourself.  Be sure to look into life insurance and disability policies so that you and your children can be covered financially during any times of disability or death.

(3) What Happens if You’re Incapacitated?

All estate plans should include incapacity planning.  If the children are adults, they can help make medical and financial decisions for their parent if they’re incapacitated.  If they are not adults, you will need to find a family member or close friend who can help make medical and financial decisions for you when you are unable.

(4) Do You Have a Trust?

If you have young children, a trust is the only way to ensure they will not receive their money until you are ready for them to and to control the way those assets can be managed.  If you have an ex still living and the children are minors, without a trust, the money will go directly to your ex to manage for the children as he or she sees fit.  If that situation doesn’t sit well with you, you will need a trust for your children with a manager that you trust to handle their assets correctly.

(5) Have You Updated Your Estate Plan?

Estate plans should be reviewed regularly to update beneficiary designations and ensure the documents still meet your intentions.  Transitional periods such as marriage, divorce, and when minors become adults are all very important times to review all plans and update them.  Don’t wait.  Take out your plan today and review it.

Single parents have a lot of responsibilities.  It can be easy to forget about the details of planning for your children if you die or are unable to care for them.  However, planning is even more important for single parent families, since they do not have a default person to rely on.

Reach out to professionals to help you refine your own estate plans.

Powered by WordPress & Theme by Anders Norén