Thursday, July 25, 2013

Tax Problems of Actor James Gandolfini's Heirs Illustrate Need for Estate Planning

Why go to the trouble of estate planning?

The recent death of Soprano's actor James Gandolfini illustrates the need for careful, individual estate planning.

The actor had a large estate, and he had a will.  But sometimes a will just isn't enough!

In this case, the will WAS enough to make his wishes known, to allow his beneficiaries to know that he cared for them, and to designate how he wanted his property to be divided.   However, it did not account for the one BIG "interested party"... the I.R.S.!

Because of the way that Mr. Gandolfini's will was written, property that he intended to go to the beneficiaries may have to be sold off to pay the tax burden.  The sad thing is, that tax burden could likely have been reduced, with planning. 

How can the I.R.S. end up "the largest beneficiary" when there is not a cohesive, individual estate plan? 

Why then do these situations happen?   There are a variety of reasons.  For example: 
1. the testator (person signing the will)  wants to "keep it simple" and believes a will is good enough;
2. the testator signs a will (better than having nothing!), and plans to do the more complex estate planning later but gets busy and never does it;
3.  the testator does not update his/her will when financial circumstances or federal or state laws change;
4.  the testator does not visit a wills and trust attorney or get adequate legal or financial advice when needed;
5.  people hate to think about death and so continue to put off the planning... for months.. and years...

What can be done to prevent a problem?

First of all, having a will is a good idea... it's a great idea!  And for many people, having a will may be good enough!  BUT for others, taking the time to do additional planning can significantly reduce the tax burden on the estate and therefore, the beneficiaries.  "Giving Uncle Sam his due" doesn't require giving him an added large bonus due to lack of understanding and planning. 

Texas Wills and Estate Planning

We all hope to live long and healthy lives, but unexpected things happen!   It is important to plan in order to minimize the tax burden and provide for your loved ones.  Don't put it off!

Review your will/ estate plan in 2014

Changes in the law are going into effect.  Review your will/ estate plan in 2014.  Make a consultation appointment with your attorney and bring your current documents for review. You may already have exactly what you need. If not, you can make the necessary changes and avoid problems later. 

Kalish Law Office - Wills and Estate Planning Attorneys - The Woodlands, Texas.  Since 1984  

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