Words Matter – Phillip Seymour Hoffman’s Will
By now you have probably heard of the untimely death of actor Phillip Seymour Hoffman from an apparent drug overdose. Mr. Hoffman had three children with Marianne O’Donnell. They were not married. Mr. Hoffman’s Will directs that all of his estate goes to Ms. O’Donnell. Had she died before Mr. Hoffman, everything was directed to go to his son Cooper. If Ms. O’Donnell were to disclaim (refuse) any portion of the inheritance it goes to a trust for the benefit of Cooper.There are several problems with how Mr. Hoffman’s estate plan is structured. His estimated net worth was $35 million. The estate could potentially owe taxes in excess of $15 million. Today I want to focus on one specific problem that was caused by using the wrong words and failing to include other important words. It is not uncommon for one spouse or partner to leave their entire estate to the other. It is also common for the contingent beneficiary to be the couple’s children. In the Hoffman Will, however, the contingent was not Mr. Hoffman’s children – it was specifically Cooper. The two children who were subsequently born to Hoffman and O’Donnell were not mentioned and as a result are not entitled to inherit any portion of the estate. Unless these were Mr. Hoffman’s explicit wishes, the more appropriate way to address the contingent beneficiary would have been to state that the contingent beneficiary was his “children.” The living child/children are specifically identified in the Will and then the following language or something similar is included: “Reference in the Will to ‘my children’ shall include the children listed above and any other children of mine born or adopted hereafter.” Had these simple steps been taken, the failure of Mr. Hoffman to update the Will after the births of his other children would have been rectified. Unfortunately, the size of Mr. Hoffman’s estate is further magnifying the problem and limiting tax strategies that can now be employed.Words matter. In legal documents, words really matter. One of the unintended consequences of trying to go it alone in doing your estate planning or having your Will, Trust or other estate planning documents prepared by someone not qualified to prepare them is that things won’t turn out like you hope and may even have devastating effects. I saw a quote online the other day: “If you think it’s expensive to hire a professional, wait until you hire an amateur.” The reality is that the cost of trying to solve a problem is invariably greater than the cost of avoiding the problem to begin with. While many words and phrases that go into Trusts, Wills, Contracts, etc. is so-called “boilerplate” - language that appears regularly in certain documents. Knowing how and when to use that language is crucial.