Much metaphorical ink has been spilled online criticizing James Gandolfini’s estate planning decisions. Granted, he didn’t maximize asset protection measures, (apparently) did not consult an Italian attorney regarding disposition of his foreign property, and made extensive use of a will, making all of this public record. However, we are not going to bash the man. Instead, we’d like to focus on some of the good lessons of his estate planning (based on the details about his estate plan that are publicly available):
Having a will is better than not having a will. In his will, Gandolfini made specific bequests to many important people in his life, including his sisters, nieces, godson, friends, and even his personal assistant. If he had died intestate (without a will), none of those people would have been provided for financially. Intestate succession statutes vary by jurisdiction, but generally distribute a decedent’s estate first to a spouse and/or children in mandated proportions. If decedent has no spouse or children, the estate goes to more remote relatives in a prescribed order, and eventually “escheats” to the state. This means that if someone dies with no will and no living relatives, the state “inherits” their estate.
Update your estate plan when your circumstances change. Gandolfini executed (or signed, in lawyer speak) this will two months after his daughter was born, right before leaving on vacation. He left her a portion of his residual estate (the sum total of everything not otherwise specifically named and left to someone else), and a 50% interest (with her half-brother) in his Italian property. If he hadn’t done so, she wouldn’t have been specifically provided for at all and his wishes with respect to her inheritance would not have been clear and would not have been carried out.
Use non-probate assets to transfer wealth. Gandolfini made reference in his will to an irrevocable life insurance trust that he had previously established for the benefit of his son. An irrevocable life insurance trust (ILIT) does not go through probate and, if properly set up, is exempt from estate taxes. That makes it an effective way to transfer a chunk of wealth while reducing the size of the overall taxable estate.
And, perhaps most importantly, don’t put off estate planning just because you’re young. Gandolfini was only 51 when he died from a heart attack. Nobody expects an accident or illness, but that doesn’t prevent them from happening. Granted, it is no fun to think about your own mortality, but making your wishes clear and enforceable can spare your family and friends from having to make difficult and painful decisions on your behalf. Don’t put off planning your estate.
In the end, you can do whatever the f*ck you want to do with your assets and leave them to whoever or whatever you want (within the bounds of the law)! However, if you want to maximize what you leave to your heirs or make specific provisions, you will probably need professional assistance. Please consult an estate planning attorney to ensure that your wishes are both clear and enforceable. And anyone who doesn’t agree with your decisions? You know where to tell them to go…
Will document: http://www.scribd.com/doc/151472900/James-Gandolfini-Will