British Columbia residents wondering whether to create a trust fund to provide for their children may consider the decision made by the late well-known actor Philip Seymour Hoffman not to do so for his own. Hoffman died in February and left his money to his girlfriend instead of his three children. The reason for this, according to a will that he wrote in 2004, was that he did not like the idea of setting up a trust fund for them. Before his death, Hoffman told his lawyer that his girlfriend, who is the children’s mother, would take care of them.
Hoffman’s opposition to a trust fund was contained in a document filed by a probate court-appointed lawyer representing his children. The will names Hoffman’s girlfriend as executor of his estate. The two never married, but their relationship was similar to that of husband and wife. Hoffman’s will contains a clause providing for a trust fund for his oldest son in case their mother died.
Trust funds are a method to set aside money for dependant children and protect those assets from probate fees and certain taxes. Another advantage that they have over traditional wills is that with a trust fund, the settlor can decide specifically where the money will go. For example, money can be applied to a beneficiary’s educational expenses.
Normally, a comprehensive estate plan can include many parts, including trusts and wills. People can also declare in their estate plans their powers of attorney to make decisions regarding their health care and finances in the event of incapacitation. An estate plan can also state who will care for minor children in the event of a parent’s death. Estate planning professionals also recommend keeping wills up to date with recent life events.
Source: CNN, “Philip Seymour Hoffman didn’t want ‘trust fund kids,’ court docs show“, Alan Duke, July 22, 2014