The New York Daily News is reporting that an estate planning attorney that they have spoken with about the subject is calling the estate plan of the deceased New York-based actor James Gandolfini a “disaster.”
If you are in possession of a significant amount of wealth you must understand the potential for asset erosion that exists in the form of estate taxes.
Many states do not have an estate tax of their own, but in New York we do in fact have a state-level estate tax. The exclusion is $1 million, and the maximum rate is 16%.
The federal estate tax has a significantly higher exclusion of $5.25 million. The maximum rate is also higher at 40%.
As you might imagine, the highly successful Sopranos star passed away with assets well in excess of these exclusions. The estimated value of his estate is $70 million.
Because the will has been admitted to the Surrogate’s Court all the details have been made public. Because of the way the estate was arranged about 80% of it is going to be directly exposed to estate taxes.
When you do the math it looks like the total estate tax bill will be somewhere in the vicinity of $30 million.
There are steps that could have been taken to position assets in a much more tax efficient manner.
You have to assume that Gandolfini knew this. Perhaps he put somewhat of a “safety net” estate plan in place under the assumption that he would have plenty of time to upgrade the plan at some time in the future.
As we can see, you never know about the future. It is best to have the optimal estate plan in place every step of the way.
- Three Tips to Provide Inheritance Planning Insight - June 11, 2021
- Veterans Pension Can Defray Long-Term Care Costs - June 7, 2021
- How Can a Special Needs Trust Trustee Use the Funds? - June 3, 2021