44 The Courier sun • HEAlth • september 5, 2013 FOR BREAKING NEWS VISIT www.couriersun.com Ready to enjoy, a richer, safer, independent lifestyle? Susan Malise Long Term Care Insurance Agent 516 481.0365 [email protected] Gandolfini’s Giant Estate Tax Error The recent death of James Gandolfini was sudden and completely unexpected. His abrupt departure saddened many, including surviving family members, fellow actors, colleagues and adoring fans. When a beloved family member dies, the loss is deep and palpable and sometimes coping with mundane matters is quite difficult. Unfortunately, Mr. Gandolfini’s poor estate planning prior to his demise has added insult to injury. No one anticipates dying prematurely, so his lack of adequate planning is understandable, but it also underscores how imperative it is to engage in estate planning when one is healthy and vital. Mr. Gandolfini died with an estate worth an estimated $70 million. According to news reports, his last will and testament left about 80 percent of his estate unprotected against estate taxes. The tax rate, considering both Federal and state, could equal approximately 55 percent. While it would have been impossible to avoid estate taxes entirely, there are certain measures that could have been taken in order to minimize the tax burden. Mr. Gandolfini’s will was fairly straightforward. He made provisions for his personal property and his house and land in Italy and he left approximately $1.6 million to friends and relatives. The remainder of his estate was divided amongst four beneficiaries: 30 percent to each of his two sisters, 20 percent to his wife and 20 percent to his daughter. There are two provisions that are key to federal estate tax planning which help minimize or avoid the imposition of estate taxes. Firstly, under current law, each person is entitled to pass $5.25 million free of taxes. Second, a person can also pass an unlimited amount to his/her surviving spouse. By only leaving 20 percent of his residuary estate to his surviving spouse, Mr. Gandolfini did not take full advantage of the unlimited marital deduction. Presumably, part of the reason that Mr. Gandolfini did not leave a larger portion of his estate to his wife is because she is not the mother of his son, Michael. When a married couple shares the same children, the typical strategy is to maximize estate tax savings by leaving everything to the surviving spouse (even the allowable credit of $5.25 million passes into a trust for the lifetime benefit of the spouse) and the children are the eventual beneficiaries after both parents pass away. When a second marriage is involved, the respective spouses are reluctant to leave everything to each other because of the fear that the money will ultimately not end up in the hands of their own children. Even in these types of cases, however, the use of a marital trust can allow for the unlimited marital deduction while simultaneously ensuring that when the surviving spouses dies, the children of the decedent’s first marriage will inherit the main portion of the estate. Marital trusts are a common planning device for people in second marriages but no such trust was present in Mr. Gandolfini’s will. Further, the estate tax can also be reduced by any charitable contributions. Had he realized that a vast amount in taxes would be due on his demise, Mr. Gandolfini may have opted to benefit various charities or other non-profit causes. Clearly, most of us do not have estates valued at $70 million. Nonetheless, the important lesson to learn here is for every person to engage in advance planning. Individuals should make sure to plan for death and/or incapacity when they are vital and of sound mind. This planning cannot remove the pain resulting from the loss of a loved one, but it can certainly ease the way. 1-877- ELDER LAW 1-877-ESTATES Queens • Long Island • Manhattan • Brooklyn attorney advertising For the best value in senior independent living, take a closer look at Flushing House! Not-for-Profit Flushing House 38-20 Bowne Street Flushing, New York 11354 freedom, friendship support in a lively, congenial atmosphere at Flushing House, the dedicated, not-for-profit senior community in the heart of Queens. It's everything you could ask for in a quality, affordable senior residence. Private apartments with kitchenettes and services from $2250/month. hour Continental breakfast, lunch, dinner Weekly linen Onsite home health agency • Ongoing recreation/activity programs • Computer learning & fitness centers • Frequent trips in our own van Flushing House celebrate living every day™ For the best value in senior living, call us today! www.flushinghouse.com 718-762-3198 Seniors enjoy freedom, friendship and support in a lively, congenial atmosphere at Flushing House, the dedicated, not-for-profit senior community in the heart of Queens. It's everything you could ask for in a quality, affordable senior residence. Private apartments with kitchenettes and services from $2400/month. • 24-hour security • Continental breakfast, lunch, dinner • Weekly housekeeping/linen services • Onsite home health agency & clinic Ongoing activity Computer learning & fitness centers Frequent trips in our own van • Call 800-345-4571 to learn about United Lifeline -- our personal emergency response service gives seniors independence and safety Will my children care about me; or for me? Unpaid family caregivers are often the backbone of the long term care workforce in the United States. Many adults in need of long term care depend on family and friends as their only source of help. Help guard what you’ve spent a lifetime building with long term care insurance protection from Genworth Life Insurance Company. For straight answers to your tough questions about long term care insurance, call me: Long term care insurance underwritten by Genworth Life Insurance Company, Richmond, VA. This is a solicitation of insurance. By responding, an insurance agent will contact you. Details about the cost, benefits, limitations and exclusions of these long term care insurance policies will be provided to you by a licensed agent. 48339 03/13/13
SC09052013
To see the actual publication please follow the link above