Sopranos star James Gandolfini died recently while in Italy. Much was made of his Will. Some criticized the fact that he did not utilize a QTIP trust to reduce or at least defer estate taxes. Some have criticized the lack of trust planning for the bequests to his sisters. But, using a Will is the hardest choice to understand.
Gandolfini’s Will left the bulk of his estate to his children, rather than to his spouse. If he had chosen to leave the assets to his spouse in a QTIP trust for life, the assets could have passed free of estate tax at his death. At the death of his spouse, the assets could have gone to his children. While this is a common technique for many couples, this may not have been consistent with Gandolfini’s intent. He may not have wanted to benefit his spouse and may have provided for her in other ways. Also, he may not have wanted to tie up his children’s inheritances for decades until his spouse’s later death. We just do not know.
Gandolfini left significant bequests to his sisters. If he had left those sums to them in trusts for life, any amounts left at their death could have escaped estate taxation. The sums could have been left in trusts providing for “ascertainable standard” distributions to the sisters and then they could have been their own trustees without causing estate tax inclusion.
(An “ascertainable standard,” such as health, education, maintenance, and support is extremely flexible.) This certainly is what I would have suggested. However, even if this had been explained to him, Gandolfini may have wanted the assets to go to his sisters outright, for whatever reason.
But, the hardest choice to understand is Gandolfini’s choice to use a Will rather than a trust as his primary estate planning vehicle. By using a Will, he subjected his estate to the process of probate. Probate delays and expense vary by jurisdiction. But, in all jurisdictions, probate is a public proceeding. It is difficult to understand why he would choose to air his finances and personal choices in public. It is even more difficult to understand why he would expose his family to this. If he had used a trust rather than a Will, we would not know to whom he had left his fortune.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
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