Tony Soprano had great lawyers to keep him out of jail, but James Gandolfini should have done more due diligence when planning his estate. Since his untimely death at the young age of 51, the details of his estate are now coming out.
Gandolfini and his lawyer made a number of mistakes, not just for tax purposes, but also for structure. His estate is reportedly worth around $70 million, which is quite good for somebody in Hollywood. First of all, he at least did the correct thing in having a will and setting up trusts. Secondly, we don't exactly know his intentions and tax sheltering may not have been one of them.
Here are some of the mistakes that he made. He did not appear to make enough use of the gift tax over his lifetime. He could have given away approximately $190k to his 15 year old son, but only $14,000 to his new 2 month old daughter. Gandolfini was married twice and had children by both wives. And here is part of the problem.
He left an Italian estate to his 2 children that have never met each other in the hopes that they will some how come to know each other through it. This is fine, but he appears to have not left a "legacy letter" spelling out exactly what he was thinking when he made these plans. It's very difficult for the children to know his intentions or thoughts while devising his will. Another problem is you better leave a huge chunk of money to maintain this estate for at least the next 25 years (that's when they'll be allowed to sell it). If not, the maintenance will either drain the family or it will fall into disrepair thus decreasing its value. Also, in this situation what is the family supposed to do if underfunded? Does the older sibling pay more of the maintenance than the underage sibling who can't get a job? Does a family where one person makes $25k be forced to pay as much as the sibling who makes $250,000? What if they hate Italy??? All of these things need to be clear.
Another major mistake, was allowing for his children to get access to their trusts at the age of 21. This is wholly inadequate for most people, especially the children of stars. The ages of 25 or 30 are much better, and yes I admit that some people will never be prepared. However, it's been demonstrated that one in general goes through leaps of maturity around those ages.
Get a will! Write a legacy letter!
Gandolfini and his lawyer made a number of mistakes, not just for tax purposes, but also for structure. His estate is reportedly worth around $70 million, which is quite good for somebody in Hollywood. First of all, he at least did the correct thing in having a will and setting up trusts. Secondly, we don't exactly know his intentions and tax sheltering may not have been one of them.
Here are some of the mistakes that he made. He did not appear to make enough use of the gift tax over his lifetime. He could have given away approximately $190k to his 15 year old son, but only $14,000 to his new 2 month old daughter. Gandolfini was married twice and had children by both wives. And here is part of the problem.
He left an Italian estate to his 2 children that have never met each other in the hopes that they will some how come to know each other through it. This is fine, but he appears to have not left a "legacy letter" spelling out exactly what he was thinking when he made these plans. It's very difficult for the children to know his intentions or thoughts while devising his will. Another problem is you better leave a huge chunk of money to maintain this estate for at least the next 25 years (that's when they'll be allowed to sell it). If not, the maintenance will either drain the family or it will fall into disrepair thus decreasing its value. Also, in this situation what is the family supposed to do if underfunded? Does the older sibling pay more of the maintenance than the underage sibling who can't get a job? Does a family where one person makes $25k be forced to pay as much as the sibling who makes $250,000? What if they hate Italy??? All of these things need to be clear.
Another major mistake, was allowing for his children to get access to their trusts at the age of 21. This is wholly inadequate for most people, especially the children of stars. The ages of 25 or 30 are much better, and yes I admit that some people will never be prepared. However, it's been demonstrated that one in general goes through leaps of maturity around those ages.
Get a will! Write a legacy letter!
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