The IRS Took Nearly Half of James Gandolfini’s Estate: Don’t Fall into the Same Trap!

Celebrity Estate Planning - James Gandolfini

Actor and producer, James Gandolfini was famously known as the implausibly likeable mafia man Tony Soprano on the long running HBO series, The Sopranos. On the show, Tony Soprano went to great lengths to protect his family. In real life, Gandolfini’s family really did mean everything and he had the best intentions when it came to providing for them. He had a will prepared by his attorney, which you can read here.  

However, he made a classic mistake by failing to take advantage of tax incentives, legal protections and opportunities. The Internal Revenue Service (IRS) ended up taking nearly half of his estate. Don’t fall into the same trap.

An Estate Planning Attorney Could Have Saved Gandolfini Millions

When Gandolfini died suddenly in 2013, his estate was an estimated $70 million. In addition to leaving $1.6 million to friends and relatives through specific gifts and bequeathing properties and land in Italy to his kids, his will was relatively straight forward. He provided:

·         30% to one sister

·         30% to another sister

·         20% to his wife

·         20% to his daughter

·         Separate trusts for his wife and his 13-year-old son

Although he was very generous to his two sisters, his plan failed to take advantage of some key tax incentives and opportunities. The only part of Gandolfini’s estate that was protected was the 20% that he left to his wife which qualifies for an unlimited marital deduction. An estate planning attorney could have saved millions of dollars that would have gone to his family instead of Uncle Sam.

It’s Not Always About Taxes

A closer look at Gandolfini’s estate, however, reveals that his probate estate was only one small piece to the puzzle. His will references that he made “other provisions” for his second wife, Deborah Lin. His will also references that he did not provide a specific share to his son Michael because he had made other provisions for him. Those “other provisions” were life insurance proceeds amounting to 7 million dollars. That trust was established as part of Gandolfini’s divorce settlement from his first marriage.

Lastly, Gandolfini’s probate estate was listed as not exceeding 10 million dollars. This accounts for only one-seventh of the estimated 70 million dollar estate. This means that non-probate transfers account for the other 60 million dollars. While it is unclear what the remainder of his estate plan looked like, the point is that not all estate plans are tax-motivated. Gandolfini likely was balancing competing interests and emotions of having a blended family. It is clear he wished to provide for his sisters in addition to his spouse, his daughter from his second marriage, and his son from his first marriage. Just as lives can get messy, estate plans can become complicated when accounting for these various factors.

3 Ways an Estate Planning Attorney Can Help You

It’s clear that anyone with an estate value equal to that of Gandolfini should have a knowledgeable estate planning attorney. However, you need a good estate planning attorney, too. Here are three ways an estate planning attorney can help you:

1.      Assess your current financial situation. Many people don’t fully understand what they have – or how to value it. A good planner always starts by reviewing your assets and income, liquid and illiquid assets, wills, insurance coverage, and estate and retirement planning documents currently in place;

2.      Identify your goals. Identifying your goals and taking your current needs into account provides the foundation for a solid estate plan structure;

3.      Develop a plan. Developing an estate plan is where we can really make a difference – especially in:

· Explaining how estate planning documents work

· Weighing the pros and cons of each of those documents

· Identifying tax issues and taking advantage of incentives and opportunities

· Creating a “network” with other professionals such as CPAs, insurance professionals, and financial advisors

Best of all, an estate planning attorney can keep you on track by periodically reviewing your estate plan, advising you when to update your estate planning documents, and steer you in the right direction to avoid having your assets taken by the IRS.

Although it appears Gandolfini had more of an estate plan than initially reported by the tabloids, it is also apparent that he could have saved a boatload on taxes with alternative planning. Protect your family by working with an experienced estate planning attorney. Contact our office today if you would like to schedule an appointment.

If you are interested in reading more about the Gandolfini estate planning, here are links to several interesting articles:

James Gandolfini's Will a "Tax Disaster" says top Estate Lawyer

Here is a Copy of James Gandolfini's Will

Interesting Blog from Attorney James Radig in Iowa regarding Gandolfini's Estate Planning

Copy of the Petition for Probate for Gandolfini

James Gandolfini's $30 million Tax Mistake     

Zach Wiegand is a Burnsville, Minnesota estate planning attorney who also handles probate in Dakota County and other counties in the greater Twin-Cities area. Zach is the owner of Gold Leaf Estate Planning, LLC, which is a Minnesota estate planning law firm that handles probate and trust administration in Minnesota. Zach was named a 2017 Minnesota Super Lawyer – Rising Star and he is a member of WealthCounsel – a national organization of estate planning attorneys dedicated to practice excellence. You can contact Zach via e-mail at zach@goldleafestateplanning.com or by calling (952) 658-6503. Gold Leaf Estate Planning is located in Burnsville at 3000 County Road 42 W., Suite 310, Burnsville, MN 55337.