The recent death of the famous actor Philip Seymour Hoffman highlights the importance of having a will and why you should continue to review and update your will and estate plan as necessary. Many estate plans contain errors or mistakes that could have been prevented, and it appears that Mr. Hoffman's estate plan is no exception.
The famous actor's will was apparently last updated back in 2004 even though he had two more children with his significant other since then. This is a big mistake and can lead to disputes and stressful arguments between family members. Leaving two of your children out of your will may make it very difficult for them to receive inheritance from their father.
Always be sure to review and revise your will after big life changes, like having children, getting married or divorced or any other life changes that would cause your will to be out-of-date. Updating your will as necessary will make sure no one you care about is left out in the cold after you have passed away.
Another issue with the actor's will is that since he was not married to the mother of his children, the estate taxes will be much higher than they would be if they had been married or if he had used a trust.
A will is one of the most important estate planning documents you can have. However, it is also important to consider the different types of documents that may be more beneficial for your family like a trust. This is especially true for individuals who have a higher amount of wealth that they want to pass on to their loved ones without making them pay a significant amount more in estate taxes.
Estate planning can be complicated and complex, especially when most people don't want to think about their death. However, taking action now and making sure you review and update your estate plan can make all the difference in the world for your loved ones in the end.
Source: Wealth Management, "Keeping Up With Philip Seymour Hoffman," Gregory Monday and Christine Reew Barden, March 3, 2014