James Gandolfini’s estate mistake

The late actor, James Gandolfini died and left an estate worth an estimated $70 million. Now thanks to bad estate planning, the IRS may take up to 50% of that estate.

The larger-than-life actor gave $1.6 million dollars to various friends and relatives. He split the rest up among the following people: his two sisters-30%, his wife-20% and 20% to his daughter. His son was the benefactor of a life insurance policy which is not subject to taxes.

The New York Daily News quotes William Zabel, the estate lawyer for the stars, as saying,

“It’s a nightmare from a tax standpoint.”

Zabel said the “big mistake” was leaving 80% of his estate to his sisters and his 9-month-old daughter. That makes the money subject to death taxes at rate of 55%.

You can read Gandolfini’s will here.

So, even being a rich celebrity doesn’t mean you can’t get bad advice.  With that in mind, here are six tips that will help you pick the right probate/estate planning attorney.

  1. Look for an estate attorney with a customized web site, rather than one with a prepackaged generic site with lots of pretty pictures. Pick a custom site loaded with informative wills, trusts or probate articles about the area of law that pertains to your situation. Content-heavy sites are prepared by experienced wills and trust lawyers, not web masters. Avoid those slick sites with lots of flash. You want an old-school law firm with knowledge, not glitz.
  2. Look for an estate planning law firm that specializes in the area of law that you need. A general law firm that says they do everything cannot possibly do everything well. The content on the web site will give you an indication of what the firm does best.
  3. Contact the NY estate lawyer directly and try to speak to the probate attorney who will be handling your case. Don’t settle for being diverted to a paralegal or an assistant. If the estate planning lawyer is too busy to speak with you initially, ask for a call back. If he or she is too busy to give you the attention you need, maybe you should try someone else. When you speak with the estate lawyer, make sure he/she is a good listener. They can’t help you if they don’t listen. It is important that you feel comfortable with your estate planning lawyer. First impressions are critical.
  4. If the New York probate attorney has client reviews on their site, read them all. You will be able to differentiate between honest reviews and canned ones. Don’t be put off by a single bad review; it will only legitimize the others. After all, you can’t please everyone all the time.
  5. Ask the NY probate lawyer to explain the entire process to you. Do not be shy; you have the right to know. A good estate lawyer should be able to explain even the most complex matter in simple, easy to understand terms. Remember, you are the boss since you are paying the bill.
  6. Finally, go with your gut. Picking the right wills, trusts or estate lawyer can be a challenge. Once you find the right person, the rest of the process will be much easier.

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Estate planning doesn’t have to be intimidating

Estate planning is necessary, but many people find the prospect intimidating. Quoted by laduenews.com,  Meredith Murphy, an attorney with Smith Amundsen’s Estate and Business Planning Practice Group in Missouri said,

“Estate planning allows an individual to manage and direct where assets are to be distributed upon their death, but [it] also lets an individual plan in order to mitigate or reduce income and estate tax, protect families with young children, save money on court costs and attorneys’ fees associated with not having an estate plan, and plan for end of life,”

So what do we say? We say she is absolutely correct.

The main effect of estate planning give you peace of mind knowing that your assets have been taken care of and there will be no loose ends after you die.

Murphy is quoted again in the laduenews.com article saying,

  “After someone dies, the worst thing in the world would be to be left scrambling in the dark, not knowing where [the deceased] loved one wanted to be buried or if [he or she] wanted to be cremated, if there is enough money for the funeral and what was supposed to happen to the contents of the house or the house itself. Having an estate plan allows you to set this all out for your family and friends so that when you pass away, your family can grieve for you and not have to worry about the logistics of death like bills, funeral and taxes.”

 

 

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Is estate planning still needed?

Last year Congress passed the Tax Cuts and Jobs Act of 2017 which pretty much killed the aptly named death tax. It didn’t actually kill it just exempted those who leave less than $11 million to their heirs.

Since the idea of no leaving a federal tax burden to their heirs, many people are questioning the need for estate planning since one of the main reasons to estate plan is to lessen the tax burden. But there is more to estate planning than tax issues.

Kiplinger.com has a very useful piece by Tracy Craig. Craig is a Fellow at the American College of Trust and Estate Counsel.  She has some useful info on estate planning beyond taxes.

To read more click on the links below:

State Estate and Inheritance Taxes Exist for Many

Probate Can be Costly

Many Beneficiaries Have Issues

Blended Families are Common and Can Be Complicated

 

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Michigan Probate Court hires attorney under criminal investigation

Last year we wrote about the scandal in Michigan’s probate system; about how some attorneys and real estate brokers were working together to cheat heirs out their inheritances, legally. Now another scandal has emerged with the news that Oakland County Probate Judges in Michigan have hired an attorney who is under criminal investigation.

We posted the WXYZ video story about this scandal last year.  Probate public administrator in Michigan cashes in on other people’s estates…legally

Barbara Andruccioli was one of the lawyers exposed by Detriot’s WXYZ 7 News investigation into collusion between probate attorneys and estate brokers to cheat heirs. She was recently hired by the Oakland County Probate Court at a taxpayer cost of $102,000/year. Channel 7 investigator asked Anruccioli,  “How can the taxpayers have any confidence with you working here?” Andruccioli answered, “Really, I think you probably need to talk to the judges.”

Andruccioli was a partner at Kemp Klein law firm and an Attorney General-appointed Public Administrator:  a public official with the authority to open probate estates after someone dies if there are no heirs available.

WXYZ reports

Andruccioli was a partner at Kemp Klein law firm. She was also an Attorney General-appointed Public Administrator, a public official with the authority to open probate estates after someone dies if there are no heirs available.

Court records show Andruccioli teamed up with real estate broker Ralph Roberts and his companies to open those estates, sell the homes, and cash in.

WXYZ uncovered court filings showing “Andruccioli and one of Roberts’ companies, Probate Asset Recovery, were billing for thousands of dollars, while the actual heirs ended up with very little.”

After the station’s investigation, Attorney General Bill Schuette terminated Andruccioli as a Public Administrator and the FBI and Oakland County Sheriff’s detectives raided Ralph Roberts offices, and launched a criminal probe into the Public Administrators.

Oakland County Clerk Lisa Brown told the station that her reaction when she first heard of the hiring was “Shock, absolute shock and bewilderment…  So out of having a wonderful pool of applicants, why would you choose this person who has a cloud over them?”

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Ultra rich and Dynasty trusts

The new tax law doubles the amount that can be passed to heirs without them having to worry about estate and gift taxes. The amount works out to about $22 million for a married couple, but is only in place until 2025. Due to this, the uber-rich are turning to what are called dynasty trusts, which secures inheritances of their grandchildren, great-grandchildren and beyond.

 Joan Antoniello, of Mazurs USA Wealth Advisors told Bloomberg News, ““For the mega wealthy, it’s really a window of opportunity that’s limited.”
Dynasty trusts let the richest Americans protect and preserve wealth for generations, while minimizing tax bills. Treasury Secretary Steven Mnuchin appears to have used one prior to assuming his government role. They can be funded tax-free with assets up to the exemption limit, which was $10.98 million in 2017 for couples, even though complex tax-planning techniques can get around that threshold.
  

Blloomberg reports that about a dozen of the nation’s top wealth planners say they’re seeing “increased interest in the trusts as clients look to capitalize on the additional $11 million they can now easily shift over. Some families want to transfer money out of their estates into the trusts in case Democrats take back control of Congress and pull the limits back down before 2025, while others say it’s best to move assets before they appreciate even more.”

Estimates are the new rules affect fewer than 2,000 families per year, but billions of dollars are at stake. A University of California, Berkeley study found that 0.1% of families control a growing share of U.S. wealth, from an estimated 7 percent in 1978 to 22 percent in 2012. The net worth of the wealthy has zoomed even higher in recent years as values of stocks, real estate and private businesses have climbed.

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