Almost one month ago, we brought you the tragic story of James Gandolfini’s death. We also discussed how he had intelligently created a will that made specific provisions for his loved ones, something of a rarity among the Hollywood elite. Although the people in El Paso may have been impressed by Gandolfini’s generosity, they may also have noticed how much in estate taxes his friends and family will have to pay.
Estate taxes can be a burden for many people in Texas and anyone with an estate over $5.25 million. One way to get around those taxes, however, is to establish trusts for people who would otherwise have to pay those taxes. For Gandolfini, that would be anyone but his wife.
In Gandolfini’s will, he left a little less than 20 percent of his money to his wife, meaning more than 80 percent of his estate was subject to estate taxes. Had he created a trust for his other family members and friends, they would have received much more.
Setting up a trust can be difficult and many people think it would just be easier to write a will. It is important to remember, however, that you worked hard for your money and you should be able to give nearly all of it to the people of your choosing, not paying the federal government up to 55 percent of your bequests. Working with an estate planning attorney can help to create trusts and avoid the cost of estate taxes.
While it is certainly clear that Gandolfini’s friends and family will not be wanting after the bequests they received, they could have received even more if Gandolfini had used trusts to provide for them.
If you would like more information, please see our previous post on specifics of Gandolfini’s will.
Source:CNBC, “Gandolfini’s will a case study on what not to do,” Kelley Holland, July 26, 2013