As the old saying goes, if we don’t learn from history, we are almost certain to repeat it. The same holds true for issues regarding estate planning. We can learn valuable lessons from those who have gone before us in Lee County, Florida and benefit from learning from their mistakes.
Valuable lessons can be learned from the estate planning of the late actor Philip Seymour Hoffman. Although the 46-year-old left his longtime partner and mother of their children a huge chunk of his estate estimated to be worth $35 million, she may not see a large portion of that money because of federal and state estate taxes.
The reason for this is the fact that Hoffman and his partner were not married and therefore she does not qualify for the unlimited marital deduction. That means the estate faces tax rates of 40 percent or roughly $12 million of the estate will go to the IRS instead of Hoffman’s family.
It was a good thing Hoffman named his partner as a beneficiary, otherwise the estate would likely have gone to his children or parents per state law. If a person is married when he or she dies and has no will, most state laws indicate that the husband or wife will receive all or part of the estate.
If you are unmarried, but would like to leave all or a portion of your estate to your partner, it is important that you have a will. You would be well advised to speak with an attorney in order to plan your estate.
Source: Daily Finance, “Philip Seymour Hoffman’s 3 Biggest Estate Planning Mistakes,” Dan Caplinger, Feb. 25, 2014