James Gandolfini of Sopranos fame was survived by a 13 year old son, an infant daughter, and his second wife. His estate is reported to be worth $70 million.
His will, prepared in December, was filed in probate court yesterday. It leaves his property in Italy equally to his children in trust, his clothes and jewelry to his son, bequests totaling $1.6 million to various individuals, and leaves 30% of the remainder to each of his sisters and 20% each to his wife and daughter. The share for his daughter will remain in trust until she reaches 21. The will states he has provided for his son elsewhere. However, almost all media outlets have incorrectly reported that his son is the major beneficiary of his estate.
Many points:
1. He should have used a funded living trust to ensure privacy of his net worth and his intentions which avoids Cincinnati attorneys from critiquing it .
2. Giving the daughter unrestricted access to her share at 21 is a recipe for disaster. He should have staggered her distributions over 10 or 15 years with the earliest one at 25.
3. The testamentary trust will be expensive to administer for the next 20 years. A living trust would be easier, less costly, and private.
4. Estate taxes will be painful and could have been delayed/minimized. The federal tax bill will be nearly $20 million while the NY bill will be over $4 million. He could have delayed the payment of taxes by leaving assets in trust for his wife and giving his daughter her share from the same trust after the death of his wife.
5. Odd to leave 60% of the remainder to his sisters and none of it to his son.
6. Unless the clothes/jewelry and Italian property comprise the majority of the assets, all media outlets from Fox News to HuffPo and from ABC to NY Post, and all others, are incorrect in reporting that the son receives the bulk of the estate.
7. The linked article also states that it is unclear who will receive the proceeds of other properties once they are sold. It must be too difficult for reporters to ask an estate planning attorney to read the will and inform them that the proceeds are the remainder and will be distributed to his sisters, wife and daughter.
8. When the mainstream media ignores big stories like Benghazi and Presidential debate moderators get their facts wrong when interjecting themselves into debates (i.e. Candy Crowley), we should not be disappointed when they can not accurately report the contents of a will. We should trust them less, though.
9. I hope that Mr. Gandolfini provided generously for his son in a life insurance trust or some other vehicle. Otherwise, the son’s trauma of finding his dying father will be compounded by receiving much less than his sister, step mom, and aunts. Maybe someday he will grow into the clothes if he uses food as comfort.
When Michael Jackson died 4 years ago, his net worth was negative $500 million. Since then, his estate has earned $1.1 billion and grows larger daily. A new Vegas show, Michael Jackson One, opened last week and is expected to run for 10 years. A prior show, Michael Jackson – the Immortal World Tour, has run for 2 years and is expected to run for at least 2 more. Jackson has earned more money since he died than during his life and is the biggest selling artist on iTunes. He is survived by 3 children of either debatable paternity or unknown maternity, all of whom have unusual or odd names.
Several points:
1. Estates can continue to earn money after the death of the individual.
2. Estate administration can be simplified if the earnings rights are transferred to a trust.
3. Biggest selling artist on iTunes? Do baby boomers still not know how to rip their CD collections, nor share them with their children?
4. Negative $500 million net worth? A personal amusement park and zoo are expensive.
Zoey Perkins is the 1 year old daughter of former Kansas City Chief Jovan Belcher and Kasandra Perkins. Belcher killed Kasandra last December before killing himself. As the daughter of a former football player, Zoey will receive $1 million in structured payments over the next 22 years. A Missouri probate court recently awarded custody to Kasandra’s first cousin instead of Belcher’s mother after a 3 day hearing.
Three points:
1. When a couple is expecting a child, they should prepare wills to designate a guardian for their children so their wishes are followed instead of giving the decision to a stranger.
2. When a couple dies without designating a guardian, sometimes the potential guardians are motivated by the financial status of the child.
3. It is easy to overlook a will in the excitement of having a child, but the impact of designating a guardian is far more important than decorating a baby’s room.
Claudia Cohen was an NYC gossip columnist whose family owned Hudson News outlets. She was married to Ron Perelman, an NYC business tycoon, from 1985-1994. Their daughter was born in 1990. Claudia died of cancer in 2007. Shortly before her death, she changed her will to name her ex-husband as executor of her estate which was estimated to be worth $68 million.
As executor of her estate, Claudia’s ex-husband has been locked in battles with her brother and now deceased father for the past five years. The battles range from the valuation of Claudia’s interest in the family business which was set by a partnership agreement, an alleged broken oral promise to leave Claudia half of her dad’s estate, and whether Claudia’s dad needed a guardian. The estate has lost all of these battles and incurred at least $5 million in legal fees, if not more, plus had to repay a $10 million loan to Claudia’s father.
Several points:
1. A value set in a partnership agreement or buy sell agreement will be enforced, even it is not the true value of the interest.
2. It is nearly impossible to win a law suit to enforce a promise to leave someone an inheritance.
3. It is never a good idea to name a former spouse as executor or trustee, much less one embroiled in litigation with 2 ex-wives at the time of the designation and known for being disputatious.
4. Claudia’s daughter will be fine financially even if her inheritance from her mother is entirely consumed by legal fees. Her father is reportedly worth $1.8 billion.