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James GandolfiniTony Soprano’s Will Debacle

James Gandolfini died tragically at 51. Because James Gandolfini’s estate “reportedly” had to pay some $30 Million in Estate Taxes to the IRS, James Gandolfini’s death was catalyst for global discussions in the press and at the dinner table. For estate planning attorneys, we were shocked at the seeming disarray of his estate plan given his wealth and that he could hire the best financial advisors and estate planning attorneys.

Tony Soprano was played admirably by actor James Gandolfini. In “The Sopranos” TV series, the IRS was the last government agency that mob boss Tony Soprano ever paid. In fact, besides the FBI, the IRS was always right on Tony’s heels! But, many newspapers, estate planning lawyers, and financial planners think that actor James Gandolfini’s poor estate planning allowed the IRS, in the end, to become the biggest single beneficiary of Gandolfini’s $70,000,000.00 estate.

James Gandolfini shocked the world on Wednesday, June 19, 2013 when he died unexpectedly from a heart attack. It had been a sweltering day in Rome, where it was reported that he had been on a strenuous sightseeing trip. The shocking thing was he was only 51. Those of us packing a few extra pounds who saw him in the media at the time of his passing, probably thought to ourselves “Yeah, he seemed a little heavy and a bit out of shape.” Millions of men and women likely thought to themselves: “There go I, but for the grace of God,” and “Guess I better hit the gym more often.”

The New York Daily News said: “James Gandolfini’s Will was a ‘Tax Disaster.’

Tony Soprano made some thug-like, clumsy moves as a character, but we expected the then-wealthy actor, James Gandolfini, to be more sophisticated. Certainly, he had the money and means to hire the best estate planning attorneys on the planet. Following his passing, James Gandolfini’s Will caused a stir of conversations over how to plan for one’s death, how to avoid estate planning mistakes, and a debate over “death taxes” (estate taxes) in the United States and whether they are fair or punitive.

The headlines in the weeks following James’ passing read: “Tax Disaster,” and “Tony Soprano Gives $30-Million Dollars to IRS.”

The New York Times staged a public debate over: “the ‘wisdom’ of Gandolfini’s Will.

This public conversation was shared for months following Gandolfini’s death by people from all socio-economic demographics. It didn’t seem to matter if the folks were middle-class or had the new-found wealth of a Tony Soprano in real life. Most observers and commentators, in my remembrance, thought it was a NOT A GOOD IDEAD to flush money down the ‘black hole’ that is Uncle Sam’s death tax (estate taxes).

Before the success of “The Sopranos” which first aired in 1999, Mr. Gandolfini was pretty much a starving actor, so it is understandable that following the series’ ending that he would be traveling the world and enjoying his new-found wealth estimated to be $70 million.

After thinking about this off and on over the past 5 years, I wonder if it was really a lack of good estate planning? Or was it just that he died before he could complete the estate planning tasks he might have been considering? Might it have been that Gandolfini thought he was in ‘better health’ than he was, and he assumed he had more time to work on his estate plan?

Maybe… But I think it is very possible that he was completely made aware of the consequences, and (at least in the moment – real time) was willing to take a $30-million dollar estate tax ‘hit,’ just to ensure some of his beneficiaries would get a CASH payout and not have to wait years for various trusts and financial instruments to pay out over time.

Surely, he could have set up more life insurance policies than the one he had that paid out $7,000,000 (tax free) to his then 13-year-old son. But given his girth, weight, age, lifestyle, and medical issues, his policy holders must have known about in minute detail, I’ll bet he was on the hook for a huge ongoing premium expense! His ongoing premiums for that single $7-million life insurance policy must have been steep.

The controversial conversations boiled down to:

  • Why did the Gandolfini estate have to pay Uncle Sam $30M in estate taxes (IN CASH) within one year of his passing?
  • Why do we have Gandolfini’s Will right here on our Boston Estate Planning Website?

As to the privacy issue, society expects that the ‘rich and famous’ never allow their private affairs to be publicly laundered by going through the Probate Courts where names, details, and finances are all laid out bare for everyone to see.

If people of the most modest means CAN and DO have Living Trusts why not Gandolfini? Eh? If everyday working people protect THEIR heirs by getting an affordable “Living Trust” to protect their loved ones’ from the burdens of Probate Court why not this famous actor? If regular folk can shield their private family details and finances from ever becomming part of the public record, why would Gandolfini (i.e. Mafia Boss Tony Soprano) end up in this ‘Joe six-pack’ mainstream circumstance? That is the core issue of the Gandolfini Will controversy.

James Gandofini’s Actual WillJames Gandolfini’s Will specifies gifts totaling $1.6 million to friends and family members, bequeath his Italian estate to his son and daughter, and divides the remainder of his estate, 30% to each of his two sisters, 20% to his wife Deborah Lin, and 20% to his daughter.

Outside of the Will, Gandolfini had created a trust for his then 13-year-old son as sole beneficiary which was funded by a $7 million life insurance policy. That was well-conceived in that the $7 million dollars is tax free.

PRESS/CLICK HERE to read James Gandolfini’s Actual Will

Estate Planning Lessons for All of Us

My Takeaway: I doubt anyone but the Gandolfini family and lawyers know the whole story. Nonetheless, there are some Estate Planning lessons for all of us:

  1. Get a Living Trust (a Revocable Trust). For very little money any individual or couple can get a revocable trust (living trust) that protects your assets while alive and effortlessly passes them on to loved ones without interference from government bureaucrats. You still have a Will (called a ‘pour-over Will’), but the purpose of that Will just instructs that your money, property and assets is to be in and dealt with by the revocable trust. Revocable trusts avoid the Probate Court and are private. MORE ABOUT TRUSTS
  2. Keep Family Business & Finances Private. This is the BIG takeaway from the death of James Gandolfini. Gandolfini’s Will had to go to public Probate Court (thus you can read it HERE on this website). If it were not for that, all this controversy and private details would not now be known to the entire world. From my perspective, as a Boston Massachusetts estate planning attorney, no one, regardless of their financial standing need their Will to end up in a Probate Court. It is a nuisance to your heirs. It takes more than a year to do what a living trust could do quickly and privately. It becomes public record – forever! Keep your private business private!
  3. Consider Tax Consequences. No one wants to pay unnecessary taxes, but sometimes there will be tax consequences if it is your desire for your beneficiaries to receive money, property and assets as quickly as possible. The beautiful thing about a Revocable Trust (a Living Trust) is that you can change it as often as you want to while you are alive. In this Gandolfini estate story, he was criticized by many for leaving an estate that had to pay exorbitant taxes. I like to think that he had good legal counsel and at that moment in time (51 years old) he knew, fully-well, the potential consequences if he was hit by a bus (or a heart attack as it turned out), but desired that his sisters would receive significant CASH even though the tax man would also collect a mighty share. In estate planning, family often trumps taxes, though, he could have avoided most, or all estate taxes had his estate plan been structured to do so.
  4. IF you have Significant Assets. Talk to an estate planning attorney about Tax Efficient Gifts to children, grandchildren and other family members. Like the $7 million in life insurance proceeds benefiting Gandolfini’s teen aged son, via a life insurance trust separate from his very public Will, Irrevocable Life Insurance Trusts (ILIT) are tax efficient ways to transfer wealth to bring down the valuation of one’s estate to duck below the Federal Estate Tax thresholds.

If you want to create a Will or Living Trust
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James Gandolfini meets Rose McGowanNOTE RE IMAGE AT PAGE TOP: James Gandolfini meets Rose McGowan in Kuwait in 2010. ‘Tony Soprano’ is the New Jersey Gangster so well portrayed by actor James Gandolfini who died of a heart attack at age 51 leaving behind a “Will disaster” that should resonate with regular folks who have not made an estate plan.

**Disclaimer** The discussion of Mr. Gandolfini’s Will and estate planning is not intended as legal advice and should not be considered as such.

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