Former “Sopranos” star James Gandolfini died suddenly in June of this year shocking many of the actor’s biggest fans. Many people may be equally as surprised to learn that as much as $70 million of Gandolfini’s estate will go to pay taxes that could have easily been avoided. Gandolfini could have avoided the huge tax burden by merely utilizing better estate planning. There are a number of lessons that can be learned from some other famous figures.
Choose appropriate guardians for any minor children
Before dying, Michael Jackson chose his aging mother to act as a guardian for his children. Jackson also chose legendary singer Diana Ross to act as a guardian in case his mother was unable to. Some wonder whether Jackson should have chosen another person to act as a guardian or backup guardian. While there is no doubt that Jackson’s mother loves her grandchildren, questions would arise if she was no longer able to serve as guardian in her aging condition before the children reached the age of majority. If this did occur, it is possible that the children would have to move across the country to where Diana Ross lives. There seems to be too much room for potential error.
Lesson: Be sure to pick a guardian that would be both willing and able to care for minor children until they reach the age of majority.
Update your estate plans
Whether you have gone through a divorce, remarried, or had a child, it is important that you do not forget to update your estate plan. Celebrity Anna Nicole Smith had a slew of problems with her estate. However, they were complicated even more by the fact that she had left everything in her will to solely her son who died before she did. In addition, Smith gave birth to a daughter without updating her will. A number of people end up filing suit as a result of second marriages and children from another marriage.
Lesson: Avoid potential problems by updating estate plans after a major life event and at least every few years.
Organize your estate plan
Many people have a wide variety of assets that can include bank accounts, life insurance policies, and investment accounts that they may leave behind. It can be difficult to keep track of all of the different assets. It can be even more difficult for someone who owns or runs his or her own business. For instance, some would describe Michael Jackson as being his own family business. Jackson had tons of memorabilia. He owned the rights to the Beatles’ songs. He also received royalties to his own songs.
Lesson: Organize your assets and make sure that your loved ones know where to find them or how to access them.
Appoint an executor without any potential conflict of interest
It is advisable that people appoint an executor who will not have any potential conflict of interest in the estate. Michael Jackson smartly chose to name professionals that he had worked with as the executor of his estate rather than naming a family member. This helped to avoid any conflict of interest. His executor has been able to administer the estate efficiently and without much issue. Those too close to a situation may not be able to avoid potential problems in administering the estate.
Lesson: Avoid potential conflicts of interest by appointing an executor who will be both neutral and administer the estate efficiently.
If you have any questions about your estate planning, be sure to contact our team of experienced estate planning lawyers at The Higgins Firm. Our Tennessee estate planning attorneys would be happy to help you.