The sudden death James Gandolfini, known primarily for his role of Tony Soprano on mafia-themed TV series The Sopranos, shocked Americans this summer. Several months later, revelations of how the iconic actor prepared his estate have been surprising as well—for different reasons.
Most would assume that someone who was as financially successful as Gandolfini would never have to worry about providing for his family and loved ones. However, while his estate was ample, the way in which Gandolfini wrapped up his affairs was puzzling and has provided opportunities to discuss some more effective approaches. A trust is one way to protect your assets and to ensure that you have more control over what becomes of your estate.
Is a Will the Right Way?
First, Gandolfini prepared a will. Though this seems like an obvious choice to most of us, choosing to write a will (as opposed to another estate planning option, such as a trust) means opening yourself up to the public eye. Wills go through probate, meaning they are filed in court. Anyone from lawyers to journalists to the general public can be privy to a process that can be a painful experience for surviving family members even under the best of circumstances.
Unlike Gandolfini, most of us are unlikely to leave wills that will be fodder for journalists, but we still may wish to avoid curious relatives coming out of the woodwork or other unsavory types. Because you don’t need to go to court or deal with probate, a trust is an ideal way to prevent this kind of scenario from arising.
Consider Tax Issues
Gandolfini evidently wanted to provide for both his sisters, Leta Gandolfini and Johanna Antonacci. He left 30% of his residuary estate to Leta and another 30% to Johanna and also made Leta the guardian of his daughter (in the event that her mother died) and one of his executors. Despite Gandolfini’s obvious affection for his sisters, Leta and Johanna will likely see much less of their money than they would have had he opted for a trust because assets worth more than $5.25 million are subject to a tax rate of 40% (unless left to a spouse or to charity). Not only that, this money will be taxed again once the two sisters die.
A trust would also have kept their money safe from spouses or from creditors, and it would have given Leta and Johanna the power to manage their trust. Considering how prominently both figured into Gandolfini’s will, his decision not to choose a trust seems a glaring mistake—but one many others can learn from. Be sure to keep the problem of taxes in mind when you consider which estate plan is right for you.
A Variety of Options
A trust allows you to get a lot more specific with your estate planning needs. Many have pointed out specific parts of his estate plan that Gandolfini could have tweaked. For example, he did create trusts to hold both his son Michael’s and his daughter’s assets until each turns 21. Gandolfini could have, however, specified that assets be held in trust beyond the age of 21, to be on the safe side; he could also have made it clear what should happen to one child’s shares in the unlikely event that one dies before reaching the age of majority.
There are also many different kinds of trusts out there. A QTIP Trust (or a Qualified Terminable Interest Property Trust) might also have been right for Gandolfini’s wife, Deborah. That way, he could have left money for her in, thus allowing her to make gifts to their daughter, Liliana, and allowing the money to go to Liliana tax-free on Deborah’s death.
These examples all represent just how many options exist that many might not even be aware of, reminding us how imperative it is to consult an experienced estate planning attorney. Though it seems obvious in retrospect, any one of us could easily make any of the errors that Gandolfini fell prey to.
Above all, the most important lesson that we can take away from his death is to make educated choices; the future of our relatives and loved ones depends upon it.