Philip Seymour Hoffman’s Will and Unmarried Partner Beneficiaries

When actor Philip Seymour Hoffman died suddenly on Feb. 2 at age 46, he left behind his life partner Marianne and their three children. His net worth was estimated at $35 million and, in 2004, around the time their first child was born, he executed a will leaving everything to Marianne.

Because the couple wasn’t married, however, the question of state and federal estate taxes was of particular concern. California doesn’t currently collect an estate tax, but Hoffman lived in New York, which does. Also, both New York and federal law treat legally-married spouses much more favorably than unmarried partners.

To address that issue, Hoffman included a provision in his will that was meant to give Marianne an option, should the estate tax burden prove too high. Specifically, she can renounce some or all of the inheritance in favor of a trust set up in the name of the couple’s son, reducing the estate and the amount in taxes she would owe.

It appears Marianne could indeed owe a hefty tax bill if she accepts the entire inheritance — some $15.1 million, according to a wealth manager interviewed by Forbes. Unfortunately, the process of disclaiming the inheritance may not go as smoothly as Hoffman had hoped.

The problem? Hoffman never got around to updating his estate plan when his two daughters were born, and his 2004 will didn’t include any language extending access to the trust to any children other than the couple’s first child. It carefully described when the son would receive the trust principal, but it doesn’t mention the girls.

How much of a problem will this be? It’s hard to tell. Regrettably, it’s all-too-common for parents to neglect to update their wills or estate plans to account for new children. While most state laws protect children born after the execution of a will from disinheritance, there are a few hurdles to jump through to ensure that happens.

While Hoffman’s situation has a number of unusual and complex aspects, the take-away for our readers is simple enough: take the time to update your estate plan whenever a significant event takes place in your life. A marriage, the registration of a domestic partnership, the birth or adoption of children, and other important changes in your life could impact your beneficiaries and your legacy, so take care.

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