Estate planning lessons from Gandolfini's will

  • Updated: July 27, 2013 - 7:46 PM
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James Gandolfini, as Tony Soprano, head of the New Jersey crime family portrayed in HBO’s “The Sopranos.” He died of a heart attack on June 19.

Photo: HBO file via Associated Press,

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A public debate has erupted over the wisdom of James Gandolfini’s will.

When James Gandolfini, one of the most recognizable actors of the last decade, died of a heart attack while on vacation last month, the response was as intense as you might have expected for the man who was Tony Soprano.

There was grieving for him as a person and remembrances of his great acting roles. That outpouring was quickly followed by a dissection of his last meal — and the drinks that went with it — and speculation about what might have caused his death at age 51.

But then something odd happened: a few weeks after he died, the discussion shifted to his will, which, unlike the wills of most wealthy people, quickly became public. Almost immediately, many experts found fault with its contents, saying it was so unwisely constructed it could lead to lawsuits from his heirs.

And then there was the estate tax bill — estimated at a whopping $30 million, nearly half of his reported net worth of $70 million all because of supposedly bad tax planning.

Was this true? Were the numbers accurate? Did any of these commentators know what they were talking about? I decided to call Roger Haber, Gandolfini’s lawyer, who drafted the will and is one of its executors. In “Sopranos” parlance, he was Gandolfini’s consigliere in life and is the man, after his death, who is bearing the brunt of the estate-tax ire.

Haber agreed to talk, cautiously, about the most-discussed will in years. “I can’t really speak in specifics,” he said. “I can talk in generalities, and you can read between the lines.”

Already, this was more exciting than most conversations I have about estate planning.

“The assumptions that many people are making are totally incorrect,” Haber said. “Everyone in his life was taken care of.”

Among the assumptions that, Haber hinted, might be inaccurate were the size of Mr. Gandolfini’s estate and his tax bill. “Everyone is focusing on some number that someone made up and the will as if it was the entire estate plan,” Haber said.

He told me that Gandolfini knew the difference between a probate asset — which is governed by his will — and a non-probate asset, like a retirement account, life insurance policy or asset held in an irrevocable trust. Haber would not elaborate; the implication was that perhaps Gandolfini had assets in other vehicles to ­mitigate his tax liability.

But I sought outside counsel to examine the will and two affidavits that were filed after it. What the expert estate lawyers and financial planners I spoke to found was a loosely drafted will that had some good points but, in its brevity and simplicity, could cause problems for any 51-year-old, let alone a famous one. They also said there is much we might not know if a more elaborate estate plan with trusts and separate corporations had been set up.

The burning question is, does Gandolfini’s estate have an enormous tax bill? The $30 million figure that was floating around is based on two assumptions that could be wrong. The first was that he was worth $70 million; the second was that his will guides how all that money is disbursed.

According to a probate petition filed on July 2, Gandolfini had property governed by his will of between $1 million and $10 million. Within that range, he had $2 million in personal property, which may or may not include royalties from “The Sopranos,” and $4 million in real property, such as his co-op apartment.

While his estate is probably worth more than $6 million, he would need to have a lot of non-probate assets to reach $70 million. He could have set up separate legal entities to hold assets, like royalties from “The Sopranos,” or put other assets in ­irrevocable trusts long ago.

He certainly may have done more extensive estate planning than his will suggests. A separate affidavit filed by his business manager said Gandolfini bought a $7 million life insurance policy for his son in 2002 and put it into an insurance trust, which is not subject to estate taxes.

Another expert agreed that taxes might not always be the most important consideration. “All these people who are out there talking about the taxes, they don’t get it,” said Leiha Macauley, a partner and head of the Boston office at the law firm Day Pitney. “The person who is trying to provide for the children from the first marriage, the second marriage, and a wife who may be the same age as his sisters, he doesn’t care about estate taxes. He wants to provide for them equally.”

Had he wanted to avoid federal estate taxes, he could have left everything to his wife, Macauley said.

The one thing Haber could have saved Gandolfini from was this column and every other article or blog written about his will. They would not have been possible if Gandolfini had had a ­revocable trust.

Such a trust would have enabled him to have a simple “pour-over will,” which would have said that his possessions had been put into the trust. No one would know anything more about his assets or his intentions.

This was the case with John Lennon’s will, which put all of his property into a trust that he had set up while alive. It left the world guessing about who got what and when, and is a model of how to keep private affairs private for any prominent person.

“Why would a guy with this much notoriety have a will in the public record?” said John Scroggin, founder of the Scroggin & Co. law firm. “I have high-profile clients and we do pour-over wills as much as anything to avoid this media brouhaha.”

Haber said that Gandolfini’s children would be fine because the actor had focused on their guardians and trustees more than the money they might inherit.

“Jim was a very smart guy, and he took all of this seriously,” he said. “He did what he wanted to with full awareness of the laws.”

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