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Gandolfini Estate Mess

September 6th, 2017

James Gandolfini’s $30 Million Estate Tax Mistake

In “The Sopranos,” the IRS didn’t stand a chance against Mafia boss Tony Soprano. But thanks to poor planning, the IRS will be the biggest beneficiary of actor James Gandolfini’s estate. Gandolfini died with an estate worth an estimated $70 million. Leaving 20% to his wife and 80% to both his sisters and 9-month old daughter. However, by doing so Gandolfini’s will have left about 80 percent of his estate unprotected against estate taxes, with rates that will add up to about 55 percent when you consider both the federal and state portions. In the long run,Gandolfini ended up giving close to $40 million to the government that he originally wanted to go to his family, as most of us would.

So, what can we learn from the mistakes of the late and great Tony Soprano? Well there are quite a few things he could’ve done differently. The first thing James could’ve done about his estate was do his best to keep it private. No one wants the court and government involved in family affairs, which is exactly what happens in probate court if  you aren’t prepared. To avoid the government deciding who gets a piece of your pie, while taking some for themselves, its best to put your assets in a revocable living trust. This is not only going to ensure that your assets are handled the way you want, but also privately and without court involvement, and minimizing taxes. An A/B trust gets two federal estate tax exemptions. The exemption this year (2017) is $5.49 million; therefore, sheltering nearly $11 million from estate taxes. Also, being more specific in the will and living trust as to which amounts of which accounts, and what assets in specific go to which specific person at a specific time. This takes away the ambiguity that we sometimes don’t see when we initially draw up our will.

At the end of the day it is your money, assets, and family, so you should be the one to decide what happens to it, not the court. In these kind of situations, it is always better to be safe than sorry. But for James, it was his family that had to handle the stress of probate. This all could have been avoided with proper planning. Building a revocable living trust can be a very simple process if you know how to execute correctly. Here at David Ortiz Advisors we believe heavily in working backwards. That means we find our clients goals for their estate and retirement — and work backwards to make that happen. No one deserves the confusion that goes along with estate planning, let alone the stress that comes with costly mistakes in estate planning. Don’t deal with the stress, and don’t walk this path alone, contact David Ortiz now and get advice from someone who has been down this path thousands of times. So what’s your situation? Call David Ortiz Advisors now, and learn how you can Plan Smarter and Live Better.