Every person approaches estate planning a little differently; and rightly so, as it can be an extremely personal experience. People are thinking not only about their own future and financial security, but also of the future and financial security of their loved ones.
That is why it can be important to remember that what might be right for one person may not be right for another. For example, many people assume that someone with significant assets and kids will likely have a trust or two set up. While trusts can be a very effective estate planning tool for some people in this situation, it is not right for everyone.
For example, the late actor Philip Seymour Hoffman opted not to set up trust funds for his children, according to recent reports. Hoffman died unexpectedly of a drug overdose and left behind three young children ages 5, 7 and 10. He was not married, but was in a long-term and committed relationship with the mother of his children.
Many people in Hoffman’s position would have set up trust funds for the children in order to make sure they are financially secure in the future. However, Hoffman reportedly refused to take that route, claiming that he didn’t want his children to be “trust fund kids.” In order to still provide for his family and make sure his children were cared for, Hoffman reportedly left all of his assets to the mother of his kids.
Sources report that not having a trust was a deliberate choice Hoffman made in the interest of his children’s futures. This can be a good reminder that every person is free to make his or her own decisions when it comes to their estate plan. However, it can be far more beneficial for everyone if people make these choices after learning about the options available. Working with an attorney through this process can help people make well-informed, purposeful decisions.
Source: New York Daily News, “Philip Seymour Hoffman did not want his children to become ‘trust fund kids’: attorney,” Barbara Ross, July 21, 2014