Actor James Gandolfini's estate, worth an estimated $70 million, may end up paying the Internal Revenue Service a whopping $30 million -- a tax bill that could have been avoided with estate planning.
Estate planning attorney William Zabel told the New York Daily News that the actor, who portrayed mafia leader Tony Soprano on the HBO series "The Sopranos," left approximately 80 percent of his estate unprotected from taxes.
Gandolfini's will is not uncommon in its intent: The bulk of his wealth goes to family and a few friends. He left approximately 20 percent of his estate to his wife, Deborah Lin. Had he opted to bequeath everything to her, he could have taken advantage of the unlimited marital deduction and owed nothing in estate taxes upon his death.
However, since his wife was not the mother of his older son, a marital trust could have been drafted to take advantage of the marital deduction while also leaving the bulk of the trust to his children.
Aside from his wife, Gandolfini also left a large percentage of his estate to his daughter and to each of his two sisters. His son received the proceeds of a life insurance policy, which will not be subject to estate tax. His will also distributes $1.6 million to various friends and other relatives.
While it's not pleasant to contemplate death, having an estate plan that accomplishes your wishes while saving taxes is simply smart planning and preserves more of your wealth for your intended beneficiaries.
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