6 Estate Planning Lessons From James Gandolfini’s Will:


James Gandolfini’s untimely death at 51 brought many discussions, none more strange than the fixation on his will. A few estate planning stories are salacious, such as the tale of Anna Nicole Smith. A few are amusing, such as Leona Helmsley’s $12M trust for her dog Trouble. But most estate planning stories are dull, and even the gaffes are not very interesting. Yet the will of Tony Soprano’s alter ego has sparked national commentary and debate over taxes, how to provide for family, and the efficacy of estate planning. Rich or poor, none of us want to be remembered for paying too much in taxes or giving our money away foolishly.

In Mr. Gandolfini’s case, the most common tag-line is that his will is a tax disaster. Here is Gandolfini’s will. Many say it dispenses his $70M estate in a clumsy and ill-advised way that lops off $30M first for the IRS. The stories should make any tax man go to the mattresses. The New York Daily News said James Gandolfini will is a tax ‘disaster.’ Lawyer William Zabel said Mr. Gandolfini’s gaffe was leaving 80% of his estate to his sisters and his 9-month-old daughter, making 80% of the estate subject to “death taxes” of about 55%. The New York Times staged a public debate over the wisdom of Gandolfini’s will.

Despite the hype, we probably do not know the whole picture. Still, here are six lessons for everyone:

1. Keep It Private. This is the most important of all. Mr. Gandolfini’s will was admitted to probate, so all these stories are possible. Most people regardless of their financial wherewithal should not need to admit a will to probate. It is public. The simple way to keep it private?

2. Use a Revocable Trust. For very little money (or do it yourself) you create a revocable trust that calls for the disposition of your assets. Yes, you still write a will—also cheap or do it yourself—but the will just says that everything you own goes via the revocable trust. It’s called a pour-over-will, since it pours all assets into the trust. The trust is private.

3. Think Taxes, But Not First. No one wants to pay taxes unnecessarily, but you first want your assets to go how you want them to go. That can change frequently during life. Another advantage of a revocable trust is that you can change it easily at any time. Mr. Gandolfini is being roundly criticized for paying tax. Even if that turns out to be true, if hewanted his sister to receive a large share, taxes may be inevitable. Taxes aren’t everything.

4. Consider Tax Efficient Gifts and Transfers.We don’t know how many tax-efficient steps Mr, Gandolfini took, but surely he took some. For example, his teenage son, mentioned in the will, receives $7M in life insurance proceeds via a separate life insurance trust. Irrevocable life insurance trusts are highly tax efficient ways to transfer wealth. No estate tax there.

5. Consider Children’s Ages Carefully. Many who have young children think they will be ready to receive and manage assets at age 21. Or 25. Or 30. Often, we revise our expectations over time as they mature (or don’t). Be careful with this one. Mr. Gandolfini’s will calls for his baby daughter to receive significant assets at 21.

6. Foreign Property is Different. Many of us dream about having a getaway overseas. But get some local legal advice. Mr. Gandolfini’s will says his Italian property goes to his son and daughter when she turns 25. But inheritance laws in Italy may override this, injecting a share for his spouse. And upkeep can be brutal, so getting the overseas property with no cash can doom the goal of keeping it in the family.

via: http://www.forbes.com/sites/robertwood/2013/07/20/key-lessons-from-james-gandolfinis-will/



Time to get organized with The Living Balance Sheet:

Whenever I come across a way for a client or friend to simplify their life I tell them about it. This is especially true with their financial life. Whether you are in the retirement years or on your way I find this a very useful tool. It can save you lots of time and confusion from bouncing around and logging in and out of the different websites of your financial institutions –and also guide you with a clear plan.

A plan that makes sure your assets won’t run out while you still need them. Check out www.TheLivingBalanceSheet.com.


The videos on the homepage will give you a good idea of the benefits. Also, as a client of our firm you’ll be able to have a single source website created for you FREE to completely organize your existing financial life. For this part, be sure to contact Benjamin Bush of the Forest Hills Financial Group. Ben is a smart, nice guy and registered financial planner as well. He can provide more information to you. Here’s his contact info:

Benjamin J Bush
Forest Hills Financial Group
122 E 42nd Street  Ste 2200
New York, NY 10168
646 638 9856 – Office
352 262 2795 – Cell
Bbush@fhfg.com – Email

You can also call me anytime to coordinate with your estate planning goals and legal needs.




Advance Health Care Directives and Living Wills

Good info via HelpGuide.org

elder law news

Although death is an inevitable part of life, many of us are reluctant to face the fact that we’re not going to live forever and plan for our end-of-life care. Thinking about your end-of-life choices today can improve your quality of life in the future and ease the burden on your family. Discussing your wishes with loved ones and preparing an Advance Health Care Directive offers the best assurance that decisions regarding your future medical care will reflect your own values and desires.

What is an Advance Health Care Directive (AHCD)?

An Advance Health Care Directive (AHCD) is a generic term for a document that instructs others about your medical care should you be unable to make decisions on your own. It only becomes effective under the circumstances delineated in the document, and allows you to do either or both of the following:

  • Appoint a health care agent. The AHCD allows you to appoint a health care agent (also known as “Durable Power of Attorney for Health Care,” “Health Care Proxy,” or “attorney-in-fact”), who will have the legal authority to make health care decisions for you if you are no longer able to speak for yourself. This is typically a spouse, but can be another family member, close friend, or anyone else you feel will see that your wishes and expectations are met. The individual named will have authority to make decisions regarding artificial nutrition and hydration and any other measures that prolong life—or not.
  • Prepare instructions for health care. The AHCD allows you to make specific written instructions for your future health care in the event of any situation in which you can no longer speak for yourself. Otherwise known as a “Living Will,” it outlines your wishes about life-sustaining medical treatment if you are terminally ill or permanently unconscious, for example.

The Advance Health Care Directive provides a clear statement of wishes about your choice to prolong your life or to withhold or withdraw treatment. You can also choose to request relief from pain even if doing so hastens death. A standard advance directive form provides room to state additional wishes and directions and allows you to leave instructions about organ donations.

Read the full article here: http://www.helpguide.org/elder/advance_directive_end_of_life_care.htm

If you have any questions, feel free to email or call me.







Turning 70 1/2 This Year?


If you are turning 70 1/2 this year, you may face a number of special tax issues. Not addressing these issues properly could result in significant penalties and filing hassles.

  • Traditional IRA Contributions – You cannot make a traditional IRA contribution in the year you reach the age of 70 1/2 Contributions made in the year you turn 70 1/2 (and later years) are treated as excess contributions and are subject to a nondeductible 6% excise tax penalty for every year in which the excess contribution remains in the account. The penalty, which cannot exceed the value of the IRA account, is calculated on the excess contributed and on any interest it may have earned.You can avoid the penalty by removing the excess and the interest earned on the excess from the IRA prior to April 15 of the subsequent year and including the interest earned on the excess in your taxable income.

    Even though you can no longer make contributions to a traditional IRA in the year you reach age 70 1/2 you can continue to make contributions to a Roth IRA, not to exceed the annual IRA contribution limits, provided you still have earned income, such as wages or self-employment income, at least equal to the amount of the contribution.

  • Required Minimum Distributions (RMD) – You must begin taking required minimum distributions from your qualified retirement plans and IRA accounts in the year you turn 70 1/2 The distribution for the year in which you turned 70 1/2 can be delayed to the subsequent year without penalty, if the distribution is made before April 1 of the subsequent year. That means in the subsequent year two distributions must be made, the delayed distribution and the distribution for that year.
  • Still Working Exception – If you participate in a qualified employer plan, generally you need to start taking required minimum distributions (RMDs) by April 1 of the year following the year you turn 70½. This is your required beginning date (RBD) for retirement distributions. However, if your plan includes the “still working exception,” your RBD is postponed to April 1 of the year following the year you retire.Example: You reached age 70 1/2 in 2011, but chose to continue working and did not retire until June of 2013. Provided your employer’s plan includes the option, you can make the “still working election” and delay your RBD until no later than April 1, 2014.

    Caution: This exception does not apply to an employee who owns more than 5% of the company. There is no “still working exception” for IRAs, Simple IRAs, or SEP IRAs.

  • Excess Accumulation Penalty – When you fail to take a RMD, you are subject to a draconian penalty called the excess accumulation penalty. This penalty is a 50% excise tax of the amount (RMD) that should have been distributed for the year.Example: Your RMD for the year is $35,000 but you only take $10,000. Your excess accumulation penalty for failing to take the full amount of the distribution for the year would be $12,500 (50% of $25,000).

The IRS will generally wave the penalty for non-willful failures to take your RMD, provided you have a valid excuse and the under-distribution is corrected.

Grandchildren Liable for Grandmother’s Nursing Home Stay After She Transferred Money to Them:

A New York trial court rules that a nursing home resident’s grandchildren are liable for fraudulent conveyance after the grandmother annuitized several annuities to them, rendering her insolvent and ineligible for Medicaid. Chapin Home for the Aging v. Heather (N.Y. Sup. Ct., No. 25327/2010, April 23, 2013).

In 2000, Lillian Heather purchased four annuities for each of her grandchildren as part of her estate plan. The annuities named the grandchildren as annuitants and beneficiaries, but Ms. Heather retained control of the accounts. Ms. Heather also appointed her grandchildren as her attorneys-in-fact under a power of attorney. In 2006, Ms. Heather entered a nursing home. One granddaughter, Kristin Goldman, signed the admission agreement as her designated representative. After entering the nursing home, Ms. Heather annuitized the annuities and the full value was transferred to the grandchildren. She applied for Medicaid benefits, but the state denied benefits because she had transferred assets for less than fair market value.

The nursing home sued the grandchildren for fraudulent conveyance, arguing that they had transferred Ms. Heather’s assets for no consideration, rendering her insolvent. The nursing home also sued Ms. Goldman for breach of contract, arguing that Ms. Goldman had access to Ms. Heather’s assets and should have used them to pay for her grandmother’s care.

The New York Supreme Court, Queens County, grants judgment for the nursing home in the amount of $287,893.95. According to the court, it was undisputed that the transfers were made without consideration.  Moreover, the grandchildren did not present any evidence that the transfers did not make Ms. Heather insolvent. Nevertheless, the court rules that Ms. Goldman is not personally liable for breach of contract because the admission’s agreement did not make the designated representative personally liable.  

For the full text of this decision, click here.

Medicaid Planning can be a helpful way to protect the assets of your family. However, you should not ‘go it alone.’ Medicaid Planning can be quite complex. Be sure to consult an attorney or law firm experienced in this field of expertise before proceeding. We have over 20 years experience in Elder Law and understand all facets of Medicaid Planning. Avoid the pitfalls and errors that can put you in a situation like above. For a free consultation, give me a call.

Regards, Brian