Nobody likes to pay taxes, but it is especially troubling when you have to pay taxes on top of taxes. This is something that the family of the recently deceased actor James Gandolfini is facing.
Throughout his life the departed star of The Sopranos paid taxes on his income, which was considerable, so the taxes were certainly no drop in the bucket. Now estate taxes are being imposed due to the event of his death.
Gandolfini lived here in New York, so his estate is subject to the New York state estate tax. There is a $1 million exclusion, and the top rate is 16%.
The federal estate tax is also a factor. The federal exclusion is $5.25 million, and the maximum rate is 40%.
When you tally up these percentages you see that they exceed 50% of the man’s estate.
There are steps that can be taken to preserve wealth if you are in a position like this, but according to reports Gandolfini, for the most part, did not take them. About 80 percent of his $70 million estate is going to be subject to estate taxes.
This is going to result in tax bills totaling around $30 million.
The actor had an estate plan in place that was not constructed well with regard to tax efficiency. Perhaps he thought that he would give the matter more attention at a later date. He was only 51 when he died.
However, there are no guarantees with regard to lifespans. The wise course of action is to be prepared for anything while you hope for the best. If you hope for the best without making the appropriate preparations your family may wind up paying a hefty price.