James Gandolfini, the actor who played Tony Soprano in the popular television series The Sopranos, died of a heart attack last summer while on vacation in Italy. Since then, countless articles have been written by estate planning attorneys and others analyzing, criticizing, and dissecting the lessons to be learned from his estate plan. Most people do not have a potential $30 million estate tax bill due to poor estate planning (which could be seen by some as a nice problem to have), but many of the other problems with Mr. Gandolfini’s estate plan are common in most estate plans.
Mr. Gandolfini’s personal choices, as well as his estate and tax planning choices have been widely criticized. For example, it is reported that he left the bulk of his estate to his children, sisters and friends rather than his spouse. By holding the assets in trust for the benefit of his wife under an ascertainable standard and then having the balance go to the children on her death he could have saved significant estate taxes. Perhaps even more problematic is that the children receive their inheritance at age 21. His 9 month old daughter will receive 20% of what is estimated to be a $70 million estate outright at age 21. Through the use of a simple trust, this inheritance could have been protected and managed for her throughout her lifetime where it would be protected from creditors, shysters, con-men, divorce, and from poor choices that are inevitable when a young person is handed a pile of money before she is adequately prepared to handle it.
Mr. Gandolfini owned real property in Italy. Real property in multiple states and foreign countries can result in multiple costly probates if not properly addressed in an estate plan. Some of his property was vacation property. Vacation properties such as condos and family cabins have unique issues that need to be addressed before they are passed to the next generation. Failure to plan can result in loss of the property or hard feelings between family members.
How does the world know so much about Mr. Gandolfini’s estate plan? It really isn’t any of our business, is it? The answer is simple. Mr. Gandolfini chose to use a Will rather than a trust. A prominent estate planning attorney stated it this way; “But, the hardest choice to understand is Gandolfini’s choice to use a Will rather than a trust as his primary estate planning vehicle. By using a Will, he subjected his estate to the process of probate. Probate delays and expense vary by jurisdiction. But, in all jurisdictions, probate is a public proceeding. It is difficult to understand why he would choose to air his finances and personal choices in public. It is even more difficult to understand why he would expose his family to this. If he had used a trust rather than a Will, we would not know to whom he had left his fortune.” Steven Hartnett, Associate Director, American Academy of Estate Planning Attorneys.
Perhaps the most important lesson to learn from this is applicable to all of us – don’t procrastinate. Mr. Gandolfini died at age 51 while on vacation. He probably assumed he had many good years ahead of him to get his planning in place. It is human nature to put off setting up a trust or updating an estate plan, but this can result in unfortunate situations and problems for the loved ones we leave behind.
To discourage procrastination and encourage proactivity, we are offering free estate plan consultations during the month of May. We will meet with you, answer your questions, and make recommendations regarding your estate planning needs, including whether a trust is appropriate for you. For more information or to schedule your free consultation, contact Kira Pulley at (480) 344-0938 or firstname.lastname@example.org.