The death of Soprano star James Gandolfini saddened the entire nation last month, as well as his family and close friends. Reportedly, the actor left behind an estate worth about $70 million, and he was generous enough to include several beneficiaries in his will. However, estate experts say that the way the will was drafted may cause some of his heirs to lose a great deal of their shares in estate taxes. Florida residents may wish to reconsider their estate planning and take several precautions, such as naming beneficiaries in special trusts, to protect the inheritances from being depleted by taxes.
Gandolfini left a $7 million life insurance policy to his son, half a million dollars each to two nieces, $100,000 to his godson, and $200,000 each to his assistant and a close friend. His residual tax, however, is subject to estate taxes. If he'd left his entire estate to his second wife, the assets could have avoided the estate tax. However, since he left his wife and their daughter 20 percent, and his two sisters 30 percent each, 40 percent of those amounts are subject to estate taxes.
Financial experts say that if he'd put the money in a special trust, those estate taxes could have been avoided while still allowing the beneficiaries a large amount of control over the money. In addition, the money he left to his minor children may have been better managed through a trust, rather than each child receiving a sudden windfall of millions of dollars upon reaching the age of 21.
These are solid reasons for anyone wanting to leave a large estate to loved ones to speak with an estate planning attorney, to be sure the assets are protected from taxes and from being spent all at once.
Source: Fox Business, Lessons Learned from James Gandolfini's Will," Gail Buckner, July 15, 2013