Wealthy individuals and families who wish to maintain the privacy of their estates should consider a revocable living trust, which does not get filed with any court, said Alan Kufeld, tax principal in the Rothstein Kass Family Office Group in New York.
The firm recommends revocable living trusts for many of its high-profile clients in the entertainment industry and professional sports. “A revocable trust will avoid probate. It’s a private document. It helps prevent [details of an estate] from hitting the Internet,” and keeps the public from finding out what assets are part of the estate and who is inheriting those assets, Kufeld said.
Beyond the nitty gritty details, estate planners say the key to minimizing taxes on a wealthy estate like Gandolfini’s is to develop a strategic plan as soon as possible and update that plan regularly.
A study by Rothstein Kass published in September found that more than three quarters of the estate plans of a majority of families wealthy enough to have their own financial offices were at least three years old, even though nearly 95% of them had experienced significant life changes during that time. That is not consistent with proper strategic estate planning, according to Kufeld.
“The estate plan is a living, breathing plan that needs to be looked at any time there is a significant change in one’s life, whether it’s a new income-producing job, divorce, or a new child coming into the picture,” said Kufeld. Such reviews ensure that an estate’s assets will be distributed according to a client’s most up-to-date wishes.
“You have to do various types of estate planning transactions early and often to create trusts and fund those trusts in ways that generate wealth,” said Breitstone. “You want to transfer the tree, not just the fruit. If you transfer assets that are likely to appreciate in value and earn income early on, you can transfer a lot of your wealth over time, but it’s really a lifelong process.”