The law treats common law spouses and married spouses the same, doesn’t it?

November 9th, 2020  |  Estate Planning

Phillip Seymour Hoffman’s Story

Philip Seymour Hoffman was a widely admired actor, who won an Academy Award for Best Actor for his portrayal of Truman Capote in a 2005 biopic. Sadly, his career was cut short when he died in 2014 at age 46 following an overdose. He left behind his common law partner Mimi and their three children, aged 5, 7 and 10. He cared deeply about his children and in his will he specified his preference that they “be raised in a city with art and culture,” preferably Manhattan, Chicago, or San Francisco.

Hoffman was a great actor but not an award winner in estate planning. He did not want his kids to be spoiled “trust fund kids” so in his will, he left almost all of his estate, estimated at $35 million, to Mimi. While his motives were good, he did not appreciate that gifts to a common law spouse would be taxed heavily New York State. This error cost his estate $12 million in taxes.

Lawyer comment: While the consequences of Philip Seymour Hoffman’s will were different in New York than they would have been in Ontario, it is important to realize that common law spouses are not always treated the same as married spouses. Proper estate planning is particularly important for people in common law relationships.