The tragic and untimely death of James Gandolfini shocked and saddened fans of the talented actor. And, since his will became public last month, there has been much commentary on the state of his affairs prior to his passing.
The actor’s will exposes common estate planning problems that can easily occur with blended families. Gandolfini had a 14-year-old son from a previous marriage and a one-year-old daughter with his second wife, who he was married to at the time of his death.
Last year, after the birth of his daughter, Gandolfini had a will drawn up that put a home in Italy in a trust for his children. He also left a separate trust to his son with an option to purchase his NY condo. The rest of his estate was split among his wife, daughter and sisters. While at first glance it may seem like his will accounted for both his children, as well as his wives and family, there are underlying issues raised by the break down.
First, although both his son and daughter were accounted for in the will, the issue remains that they were treated differently. Gandolfini bequeathed his son a trust that included a seven-million dollar life-insurance policy that is not subject to estate tax. His daughter’s portion of his estate (20%) will be subject to estate expenses, creditors and taxes.
In situations like this an “ethical will” or “legacy letter” can clear up such discrepancies. While it is not a legally binding document, it would clear up the intentions of an estate plan.
A second issue involves the Italian property that Gandolfini left to the half siblings, which, according to the will, he hopes they will decide to keep, but if not, they cannot sell until both reach 25. For his elder son, this means he will be nearly 40.
This is a nice notion, but does not take into consideration the more practical aspects of home owning. Who will be expected to maintain the house? After all, there is more than a decade separating the two children. Will they pay equally, or will the elder son be expected to pay more as he becomes an adult first?
While Gandolfini clearly intended to provide for both his children, doing so in a variety of ways may have ultimately left each child with a different amount of money. This is hard to know for sure, as his son’s trust is more public knowledge due to the court documents of his divorce from his first wife. Since trusts are not made public documents, it is unknown how his daughter was compensated.
Ultimately, Gandolfini was worth an estimated $70 million dollars at the time of his death and his family will surely be sufficiently provided for, regardless of the specific delineations. But, his situation brings up important ideas for others with blended families or children from more than one relationship. There is often a debate surrounding these scenarios: is it better to be fair or equal? Many argue that there is less to contest when equality is maintained. Treating children differently can often lead to the unfortunate and untrue conclusion of favoritism. Yet, what if one adult child is significantly more successful than the other and one child clearly needs more help than the other? In cases like this an “ethical will” or “legacy letter” will surely come in handy, and provides you the forum in which to discuss the choices you have made and the reasoning behind them.