Estate Planning Could Have Saved Gandolfini Millions in Estate Taxes

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I was quoted recently in an article on "Estate Planning Missteps" that referred to the heirs of James Gandolfini. Gandolfini is the acclaimed actor who played Tony Soprano on the award winning HBO series, "The Sopranos". His estate was worth an estimated $70 million at the time of his death. It was divided among his wife, sisters, newborn daughter, and various friends.  He also created a trust for his son, Michael.  His assets included a life insurance policy and a condo.

The estate tax bill will be enormous, due to the way the estate is structured.  Estate planning would likely have saved a good portion of that tax burden - literally, millions of dollars in federal estate taxes.  The estate will be taxed at a whopping 40% federal rate. He'll also owe New York state estate taxes - his official residence is in one of the few states that imposes its own estate tax, so he only gets a $1million break there.

Options for estate planning could have included a "marital deduction trust" for his wife, which would have allowed her to use all of the assets in the trust until her death and would have deferred payment of the federal estate tax until that time.  The marital deduction trust is a great tool in "blended family" situations - it is quite common for such trusts to provide that after the death of the surviving spouse, the remaining assets are distributed to all of the children, including children from prior marriages.  If Gandolfini had done that, his son Michael might have been assured of receiving a bigger portion of the estate.

There were other options, of course.  As I stated in the Lawyers.com article, Gandolfini could have established irrevocable life insurance trusts and and charitable remainder trusts (among other sophisticated tax-saving devices).  Advanced estate planning could have netted the family more money, with a smaller payout to the IRS. To read the original article, visit the blog entry on [lawyers.com].