Usually not too long after a celebrity death comes the news of who gets the estate. Frequently, these battles become the fodder of entertainment news for months as family members, business associates and countless others jockey for position for assets, guardianship of children and numerous other issues. But when a multi-million dollar estate hasn’t been properly planned for life after death, the first “heir” to collect may be the estate tax office.
This appears to be the case after the recent sudden death of “Sopranos” star James Gandolfini. The award-winning actor died unexpectedly at the age of 51. While he did have a will, and had even prepared a trust for his son Michael, apparently neither was designed to avoid a huge estate tax bill. Of the star’s estimated $70 million estate, estate planning experts say that over $30 million of that could go to the government to pay estate tax.
What may be even worse than the amount that is owed is when the estate tax tab is due. The government will start looking for their share of the estate to be paid within nine months. Unless much of the $70 million is in readily accessible assets like cash or easily collectible insurance proceeds, the family may actually have to sell assets such as houses, cars, and art to pay the estate tax bill before the estate exits probate.
While most of us won’t die with an estate worth $70 million, the point is to make sure that what you do have goes to your heirs or a charity or wherever you prefer. Otherwise, the government will make sure that they get their share in estate tax before anyone else has a chance. Gandolfini’s death is evidence of the unexpected – no one expected him to die in a hotel suite in Rome at the age of 51. It is never too soon to consult with an estate planning attorney to minimize the amount of your estate that will not go where you want. In the end, even Tony Soprano can’t win a fight against the tax man.