      
  4.9 
   146 reviews

Three Estate Planning Lessons From the Death of James Gandolfini

Request a Case Review

Kantrowitz, Goldhamer, Graifman, Perlmutter & Carballo, P.C.

10b9db026d89119e951a851045ac17eee7784f79

Written/Reviewed By:

Barry S. Kantrowitz, Esq.

Last Updated: Aug 5, 2013

Read Time: 5 mins

1. A little knowledge is dangerous.

Shortly after the Will of actor James Gandolfini was filed for probate, it became the focus of commentators who offered opinions concerning the quality of the estate planning reflected in the actor’s Will. A fundamental principle of estate planning is that it must be done in context. The aggressive criticisms of the planning for the Gandolfini Estate must be taken with a very large “grain” of salt – no commentator was in a position to gauge either the effectiveness of the overall estate plan or the role played by the actor’s Will in his total estate plan.

It was widely reported that Gandolfini’s Estate would be subject to payment of estate taxes amounting to $35,000,000, and that his Will did nothing to mitigate that huge “tax bite.” Those assertions are meaningless without consideration of the appropriate context. It would take a net taxable estate of approximately $70,000,000 to give rise to $35,000,000 in combined federal and New Jersey State estate taxes. The probate petition indicates that James Gandolfini’s gross probate estate amounted to only approximately $6,000,000, a mere fraction of the assets needed to result in such substantial estate taxes.

We might assume, but we do not know, that Gandolfini’s estate includes more than $60,000,000 of “non-probate” assets (i.e., assets passing outside his Will). We have no information, however, regarding the disposition of those assumed additional assets, nor do we know the extent to which all or any part of them will be subject to estate taxation. There are techniques to reduce the estate taxes payable with respect to non-probate assets, as well as with respect to assets passing by Will.

A Will disposes only of individually owned property – it does not dispose of property held jointly, with right of survivorship; nor does it dispose of beneficiary-designated property, such as life insurance proceeds, “in trust for” or “pay on death” bank accounts, guaranteed annuities, and IRA accounts or other retirement plan benefits.

2. Wills become public documents.

Perhaps the biggest lesson to be drawn from the media circus following the filing of the Gandolfini Will is that, when filed for probate, a Will and the accompanying probate petition become public documents. Most people, however, other than high net worth individuals and persons living in the public eye, are unconcerned that certain facts about their family and financial situations can be scrutinized by the general public following death. For those who are concerned about such matters, there are alternatives to using a Will as the primary estate planning vehicle, such as transferring assets to a “Revocable Living Trust” which will preserve personal and family privacy. Given Mr. Gandolfini’s high profile, it was surprising to some that he used a Will to dispose of even a part of his assets.

3. Tax minimization is not the be-all and end-all of estate planning.

At the heart of any estate plan should be a sensible relationship between the testator’s assets and his or her intended beneficiaries. Nobody likes paying taxes, but it is unfair for several reasons to criticize James Gandolfini’s Will for a “failure” to make optimal use of estate tax minimization strategies.

First, use of the marital deduction often only postpones the payment of estate taxes until after the death of the first decedent’s surviving spouse, rather than “saving” estate taxes. Any actual savings often is largely limited by the extent to which the surviving spouse could not fully utilize the available estate tax exemptions, without reference to an inheritance from the decedent. If the estate of the surviving spouse would fully utilize the available exemptions, any savings might be outweighed by the estate tax on the appreciation of inherited assets occurring between the two deaths.

Second, non-marital deduction estate tax minimization strategies can involve a separation of control from value (e.g., a family limited partnership arrangement designed to obtain estate tax valuation discounts typically makes the limited partnership interests subservient to the controlling general partner, and a so-called “charitable lead trust” will require that the intended individual beneficiaries wait years to receive their inheritances) or even a complete loss of value (e.g., outright charitable gifts reduce the estate taxes payable, but also work a net reduction in the remaining non-charitable inheritances).

Third, many high net worth individuals (especially those who have made, rather than inherited, their own fortunes) take the position that it can be harmful to inherit too much money, robbing a young heir of ambition. Such persons devote more effort and attention to “incentivizing” their children and grandchildren than they do to maximizing their inheritances.

Fourth, when an intended beneficiary is very young (James Gandolfini’s daughter was only two months old at his death) or under some other legal disability, the primary concern should be to structure that beneficiary’s inheritance in ways that make practical, human sense.

The most valuable benefit from a probate petition being filed for Mr. Gandolfini’s Will may be the healthy debate it has sparked over the purposes and uses of estate planning and the care to be used in designing a plan that suits the intentions and situation of each individual.

Kantrowitz, Goldhamer, Graifman, Perlmutter & Carballo, P.C. – Wills, Trusts and Estate Lawyers

Why Trust Us?

150+ Reviews

50+ Years of Service

Full-Service Law Firm

Client Reviews

    
 
 
      Posted on Google  
   LWelsh 
 29 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Clever and efficient.
  
 
     Posted on Google  
   Kenny Perlow 
 50 days ago
 
 
 Trustindex verifies that the original source of the review is Google. KGG Law, and Barry Kantrowitz in particular, set the bar high for what a thorough, practical, strategic, compassionate and smart lawyer can be. Everything about Barry's advice and representation was exemplary and the stress mitigation that resulted was invaluable. On top of that, the ultimate result Barry achieved was beyond what was reasonable to expect and we are forever grateful. Often, people say that you hire a lawyer to prevent a problem. Sometimes, unfortunately, you need an attorney to solve a problem and I could not recommend Barry and his firm any more highly in that regard.
  
 
     Posted on Google  
   Aliza Ali 
 114 days ago
 
 
 Trustindex verifies that the original source of the review is Google. My dad had a great experience with this law firm. From the very beginning, the team was professional, knowledgeable, and always willing to answer our questions. They kept us informed throughout the entire process and made what could have been a very stressful situation much easier to handle. We truly appreciated their dedication, honesty, and hard work. Thanks to their support, my dad felt confident every step of the way. We are very grateful for everything they did and would highly recommend this firm to anyone looking for reliable legal representation.
  
 
     Posted on Google  
   Jana Montero 
 117 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I had a wonderful experience working with Sam Smith. He was very responsive, thorough, and easy to work with from start to finish. He walked me through everything clearly and made what started as a very stressful situation for me into something completely manageable. I would not hesitate to recommend him and the firm!
  
 
     Posted on Google  
   Mike Sakmann 
 123 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I sought legal advice regarding an employment matter and had an excellent experience working with Sam Smith, Esq. at KGG Law. Sam was thorough, attentive, and took the time to listen carefully to my concerns before providing clear, thoughtful guidance. I appreciated the professionalism and care shown throughout the process, and I would confidently recommend KGG Law to anyone in need of legal assistance.
  
 
     Posted on Google  
   Liz Hecker 
 129 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I can't say enough about this firm. They manage to comfort you during the whole legal process while staying professional and doing what is right. I would recommend them to anyone and also hire them again if I need legal help.
  
 
     Posted on Google  
   Brandy Miller 
 152 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Kate is the best. She helped me very quickly, and was very attentive with all of my needs. So thankful for her
  
 
     Posted on Google  
   Mike Greenspan 
 165 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Kate Carballo is a dedicated, passionate, and creative attorney whom I had the pleasure to lecture with at a state trial lawyer's conference. Kate's lecture demonstrated how she uses her innovative and "out-of-the-box thinking" to achieve outstanding results for her injured clients. That Kate is certified by the Supreme Court of New Jersey as a civil trial attorney is a testament to her skills, experience and commitment to excellence.
  
 
     Posted on Google  
   Jonathan Sampson 
 172 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Was referred to KGG law by a friend and could not have asked for better legal representation. They walked me through every step of the process after my accident and began every call with “ how are you feeling” which was just one example of how much they care about their clients. They handled my case very efficiently, professionally and courteously. My attorney Kate Carballo was a rock star! So clearly experienced, she consistently made me feel at ease with the process. Highly recommend
  
 
     Posted on Google  
   Vinnie Kung 
 175 days ago
 
 
 Trustindex verifies that the original source of the review is Google. We had a great experience with the team at KGG Law. While it was a traumatic time for our family, they made it very easy for us and explained all of our options. They even performed due diligence to make sure that after our settlement, there would be no further issues which I think is even more important than the settlement itself. Thank you!

see all reviews

Three Estate Planning Lessons From the Death of James Gandolfini

Why Trust Us?

Rockland County, New York

Bergen County, New Jersey