Taxes Hammer Gandolfini Estate
Actor James Gandolfini, who rose to stardom playing the role of Tony Soprano on The Sopranos, died recently at the relatively young age of 51. He will certainly be missed.
Gandolfini left behind quite a creative legacy in the form of his work. He also left behind a significant financial legacy. However, his family could have wound up with much more money if he would have planned his estate more effectively.
Most of what he left behind will be transferred to his heirs according to the terms of his simple last will. Because he only had a simple will, these transfers will be subject to estate taxes on both the federal level and the state level.
Gandolfini lived in the state of New York, so the state of the New York is rearing its ugly head in the guise of the New York estate tax. The exclusion for this tax is just $1 million, meaning that only that sum can pass to his heirs without a New York death tax. The rest of the estate is taxable at a maximum rate of 16%.
The federal estate tax exclusion is $5.25 million, and the top rate is 40% for assets in excess of that sum.
The New York Daily News is reporting that a prominent estate planning lawyer that they spoke with called the matter an unmitigated estate planning “disaster.”
While the family will still inherit a large sum of money, a great deal will be lost to the taxman.
The total value of the Gandofini estate is estimated to be somewhere in the vicinity of $70 million. Estate taxes on the two different levels will consume some $30 million of his fortune. The heirs to the estate will be left with the remaining $40 million. And the process of death probate will take a financial toll as well.
The taxes Gandolfini’s estate will pay are in fact voluntary taxes. That is, he could have made plans to significantly reduce or even eliminate those taxes. That’s what estate planning lawyers do. This is one mess Tony Soprano can’t muscle his way out of.