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California estate plan “flaws” may reflect a decedent’s wishes

On Behalf of | Jul 26, 2013 | Estate Planning |

Actor James Gandolfini was worth an estimated $70 million at the time of his death. Reports said the star of the HBO series “The Sopranos” left behind a will that passed the bulk of his fortune to a baby daughter and siblings. Critics felt estate planning mistakes cost the late actor’s heirs tens of millions of dollars.

California estate plan goals include arranging wealth so loved ones’ assets are not depleted by needless taxes or probate litigation. According to sources who claimed to have viewed Gandolfini’s will, federal taxes will cut the estate’s value by approximately $30 million. Gandolfini’s daughter and sisters could receive 80 percent of $40 million not $70 million.

The assets left to the actor’s widow apparently fell under the remaining 20 percent. Gandolfini could have left the entire estate to his spouse tax free. The privilege spouses have in estate settlements does not extend to other family members.

A $7 million life insurance trust will benefit Gandofini’s teenage son. The proceeds are excluded from federal taxation. A significant share of the daughter’s inheritance will be distributed when she is 21, an age some estate planning advisers say could be too young to handle great wealth.

The boy and his sister will come into property in Italy when the now-9-month-old girl turns 25. The property may be a hardship for the siblings if their father did not set aside funds for property maintenance, foreign legal issues and taxes.

A revocable trust would have permitted the 51-year-old actor to keep the distribution of his estate private. The trust would have been easy to alter as relationships and other circumstances changed during Gandolfini’s lifetime.

Attorneys guide the use of estate planning documents by providing advice and options to safeguard wealth. Individuals make the final decisions about estate handling with or without concerns for tax advantages or privacy.

Source: forbes.com, “6 Estate Planning Lessons From James Gandolfini’s Will” Robert W. Wood, Jul. 20, 2013