James Gandolfini's Lack of Proper Estate Planning

07/18/2013

James Gandolfini, who won awards for playing mob-boss Toney Soprano in HBO's "The Sopranos" won't win any awards for estate planning.  Gandolfini died of a heart attack in June, 2013.  If we can believe what we read, details are now emerging of the late actor left by way of an estate plan. 

According to reports, Gandolfini was worth approximately $70 million at the time of his death (I guess being a mob boss does pay).  At the end of 2012, Gandolfini executed a Last Will and Testament.  He also created at least one trust which was referenced in his Will.  

While it would appear at first blush that Gandolfini did the proper estate planning, the recent revelation of his will (which you can read here) shows otherwise.

Based on what I have seen, Gandolfini did not plan enough.  It looks like he failed to do the proper tax planning that would have enabled his estate to avoid -- or at least reduce and delay -- paying estate taxes.  The New York Daily News reported that this faliure could subject 80% of his estate to the federal estate tax.  At a rate of 40% for all assets over $5.25 million, that totals more than  $20 million in federal estate taxes alone.

Gandolfini's estate plan also used a Will as opposed to a Revocable Living Trust.  A Will must be filed in probate court to be administered.  It is a matter of public record and with probate comes time, delay and expense, all of which could have been avoided.

Gandolfini's faulty estate planning can provide a good lesson to all of us.  That is, for most people, it is much better to use a properly-funded trust -- especially for someone with assets worth more than the estate tax threshold.