James Gandolfini’s estate is reportedly about to be gutted by the federal government.
James Gandolfini will calls for 80% of his estate to go to his sisters and his 9-month-old daughter Liliana, according to reports, which subjects them to death taxes – which are levied at a rate of about 55%.
The remaining 20% goes to his widow.
As written, the will subjects everyone involved to significantly more taxation than is normally the case.
“It’s a nightmare from a tax standpoint,” estate lawyer William Zabel told the New York Daily News, calling the segregation of assets a “big mistake” saying the will is “a disaster”.
The enormous tax bill – about $30 million – will be due in about nine months, according to William Zabel.
James Gandolfini, like most high net worth people, probably didn’t keep his assets in cash, which will force his family to sell off his multiple properties and liquidate other holdings to cover the bill, explained William Zabel, but they will have a little wiggle room.
“They can get an extension of time to pay the entire amount, but they’re going to have pay a substantial amount in nine months,” said William Zabel.
Though the exact amount of James Gandolfini’s estate is not known since an inventory does not have to be filed until December, estimating it to be worth $70 million leaves heirs to divvy up $40 million after taxes instead of $70 million before taxes, since the will calls for shares to be divided after settling the tax bill, according to the Daily News.
This leaves Deborah Lin, James Gandolfini’s widow, with a significantly smaller share of the pie, according to William Zabel.
“It’s a catastrophe,” the lawyer said.
Untouched by the taxation issues will be a $7 million life insurance payout to Michael Gandolfini, the actor’s 13-year-old son. Separate trust funds had also been set up for James Gandolfini’s wife and son prior to his passing, according to the Daily News.
James Gandolfini died last month in Rome after a massive heart attack. He was in Italy attending a film festival with his family.
Any royalties from his lengthy acting career in film and television going into the estate would also be subject to death taxes. It’s not yet clear whether they are set up to go into trusts or the estate, the Daily News reported.
Should the sisters and daughter renounce their shares in the estate, they would avoid taxes and be able to receive larger payments down the road, since they would default to Deborah Lin as spouses are not subject to the same rates of inheritance taxes as others.