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When planning an estate it is important to ensure that one’s intended beneficiaries receive one’s assets. However, another aspect to take into consideration is estate tax planning which can help minimize tax liabilities of the estate. James Gandolfini, who many in Florida will remember as a well-known actor, may have had other objectives outside of this essential part of estate planning which has, unfortunately, led his estate open to unnecessary tax liabilities.
One thing the actor did which left his estate unprotected from tax liabilities is leaving less than 20 percent of his assets to his wife with the remainder of his estate going to his infant daughter and his sisters. This means nearly 80 percent of his assets could be subject to federal and state taxation which could be at a rate as high as 55 percent. The actor’s will states that arrangements for his son from a prior marriage were made separately.
The actor could have taken more advantage of his allotted marital deduction which enables him to transfer as much of his assets to his surviving spouse without leaving the assets open to estate tax liabilities. Putting assets in a trust is another option for avoiding estate taxes. Also, if a person owns real estate in a foreign country, such as Gandolfini did, one should take into consideration the governing laws in the foreign country, which the actor did not do in his will.
These are just some of the important aspects to consider when doing estate tax planning in Florida or in any other state. It is critical to have an understanding of estate planning laws and how they apply to one’s specific situation. Also, everybody has different estate planning goals and tax efficiency may be just one of many goals.