Late actor's will illustrates 'after born child' problem

Many in Texas and the rest of the nation were shocked to learn of Oscar winner Philip Seymour Hoffman's sudden passing. As his family grieves his loss, they reportedly also have to deal with a complicated legal matter surrounding his will.

The situation they are facing is a common one and is known in the estate planning world as the “after born child” problem. Essentially, the actor’s will was last updated in October 2004, after the birth of his first child but before the birth of his two daughters, who were unintentionally disinherited.

Further complicating the issue is the fact that Hoffman was not married to his partner, who is also the mother of his three children, so if she first inherits his estimated $35 million estate there could be a tax penalty of up to $15 million.

It will now be up to the court to apply the complicated state law to the facts of the case in effort to sort everything out and hopefully arrive at what Hoffman likely intended -- for all three of his children to share his estate equally and without significant tax burdens.

An article from Forbes recently pointed out that this situation could have been avoided if the famous actor had updated his estate plan after the birth of his two daughters. But it could have also been avoided with one simple phrase in the 2004 will stating that any reference to the actor’s first child also included his children born after that date.

Unexpected death is one of the most difficult experiences a family can go through, especially when complicated legal issues add unneeded stress. That’s why it’s important to work with a knowledgeable estate planning lawyer to make sure you have a solid estate plan in place.

Source: Forbes, “Philip Seymour Hoffman's Will Raises Legal Problems,” Deborah L. Jacobs, Feb. 20, 2014

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