PHILLIP HOFFMAN’S ESTATE PLANNING LESSONS

Philip Seymour Hoffman died at the age of 46, with a $35 million estate. Mr. Hoffman left a will, giving much of his estate to his long-time partner and mother of his three children, Marianne O’Donnell. Because Mr. Hoffman, who apparently did not believe in marriage, and did not want his children to be ‘trust fund’ kids, left everything by will, his estate paid around $15 million in estate taxes, to the detriment of his heirs.

PROBATE ADMINISTRATION – TESTATE VERSUS INTESTATE

Does having a will mean you can avoid probate? The answer is, unfortunately, no. Having a properly drafted and funded trust is the surest way to avoid probate.

However, having a will (testate) does result in some differences; and having a will is always preferable to not having a will (intestate). With regard to probate administration, having a will means that the Probate Court will know exactly who you want to handle your affairs, and how your want your debts and assets to be handled.

WHAT ARE “LETTERS TESTAMENTARY?”

Letters testamentary (aka "letters of administration" or "letters of representation") refers to the official document issued by the relevant probate court authorizing the administrator (“executor” if there is a will, or “personal representative” if no will), to take control of a deceased person's estate.

WHY NOT TO USE ONLINE LEGAL SERVICES

1) Actual Legal Knowledge

What kind of power of appointment should you include? Should you include provisions for an administrative trust, or a trust protector? What about a resulting common trust for your children? Which marital funding option should you use upon the death of the first spouse? How should you balance the desire for asset protection for the surviving spouse, with a step-up in basis for the trust assets? Should you name your trust as the beneficiary of your life insurance policy? These are questions that generally cannot (and should not) be answered by laypeople, but are integral to the trust drafting process.