James Gandolfini, the actor best known for his portrayal of Tony Soprano on HBO’s The Sopranos, died suddenly last month while on vacation in Italy. His will was on the Internet almost immediately, available for everyone to read—which is the first lesson one should take away from what he did and did not do right in his estate plan: establishing a trust keeps your private financial matters private.
Here are five other estate planning lessons learned from James Gandolfini:
Lifetime trusts are often better for beneficiaries. James Gandolfini’s 13-year-old son and infant daughter will inherit a large portion each of the actor’s estimated $70 million estate once they reach the age of 21. It may have been better to establish lifetime trusts for each of the children, then making them co-trustees at 25 or 30, then sole trustees at the more mature age of 35 or 40. This would have protected their inherited assets for life, from creditors, bankruptcy, lawsuits and divorce.
If you own foreign real estate, you need a foreign estate plan. James Gandolfini owned property in Italy, which his will specified should be turned over to his children. However, Italy has forced heirship laws that may trump the will. He should have consulted with an Italian attorney and had an Italian will drawn that passes the property in accordance with Italian law.
Update your will regularly. James Gandolfini had updated his will just six months prior to his death, and a few months following the birth of his daughter. By taking action to update his will following the new birth, he saved his heirs a lot of headaches and heartaches. But unfortunately, he missed a big one—he did not update for estate taxes.
Irrevocable Life Insurance Trusts are a smart move. James Gandolfini established an ILIT for his son Michael and funded it with a $7 million life insurance policy. By setting up an ILIT, the proceeds from the insurance policy flow directly to the trust, with no New York or federal estate taxes on the $7 million.
Multiple executors and trustees can provide necessary checks and balances. James Gandolfini had two children with two different wives. He named his sister, his current wife, and one of his attorneys as co-executors of his will and co-trustees of the testamentary trusts set up in his will, which was a savvy move to prevent any one beneficiary from being favored.
The one thing that Gandolfini and his lawyers did not think about enough was his estate taxes. He will owe nearly $30,000,000 in estate taxes and much of it could have been avoided with good planning in advance.
Note from the author: As a Personal Family Lawyer®, I can further advise you on all your options and make things as easy as possible for your family during a Family Wealth Planning Session. If you would like to have a talk about estate planning for your family, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, and this month I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.