Philip Seymour Hoffman was a brilliant actor. His recent death was a tragedy. Many of the actors and actresses that had worked with him on significant films spoke very highly of Mr. Hoffman as a human being, a collaborist, and as a brilliant and gifted actor. Although Mr. Hoffman may have been a brilliant actor, he was not very sophisticated when it came to preserving his assets in the event of his death. Mr. Hoffman left a large portion of his assets to Marianne O’Donnell. He was not married to her. As a result of his not being married to her, all of the money he left her over $5,340,000 will be taxed under Federal Estate taxes at the rate of 55%. In addition, all of the funds he left her over $1,000,000 will be subject to an additional New York State Inheritance tax of approximately 14%. When Ms. O’Donnell dies, unless she is married to someone, all of the money that was left after taxes, which she received from Mr. Hoffman will again be taxed by the Federal and State governments.
Unlimited Marital Deduction
There is a way of avoiding estate taxes among married individuals. This is referred to as the unlimited marital deduction. This allows all assets that are inherited by a spouse to pass to that spouse free of both Federal and State inheritance taxes. The unlimited marital deduction, as well as other significant estate planning techniques, are utilized by estate planning attorneys to allow the assets to go from one generation to the next, or from one individual to another, without incurring a very significant reduction of the assets due to estate taxes.
Other Will Related Problems for Mr. Hoffman
Mr. Hoffman drafted his will shortly after his first son was born. His will did not lay out a scheme for future children. Therefore, Mr. Hoffman’s two children who were born after he executed his will receive no assets or inheritance under this will.
Wills should be drafted taking into consideration all the significant factors that would impact on inheritance schemes. Inheritance tax considerations are only one of the important issues that need to be dealt with when setting up an estate plan. Sometimes estate taxes can be eliminated and in other situations they can be minimized. Wills also should be updated and reviewed by the attorney draftsman and the client when significant issues or changes take place in an individual’s life.
The Law Offices of Schlissel DeCorpo have been providing sophisticated estate planning for the firm’s clients for more than 45 years.
