The latest changes to the federal estate tax exemptions have sparked a great deal of debate between those who support the measures and those who are concerned by what they view as more perks solely for the rich. Multiple loopholes that the accountants of the rich have found have led to the small percentage of estates affected by estate taxes usually paying only a small percentage of what they owe. However, some estates have made crucial mistakes that led to their estates being severely decreased through taxation. The following are famous people whose estates were taxed heavily because of estate planning errors.
Sammy Davis Jr.
The famous singer and actor Sammy Davis Jr. spent six decades entertaining and passed away in 1990 of throat cancer. When he passed away, the legendary celebrity left behind a large collection of goods signed by other celebrities including Marilyn Monroe and Elvis Presley and other memorabilia accumulated during his successful career. The entertainer also left a will that awarded generous bequests to his surviving friends and family members. Unfortunately, his estate plan did not account for his debt nor did it evolve with the changes in law that disallowed his various tax shelters. When the singer passed away, his estate was left with an Internal Revenue Service (IRS) debt of $5 million that eventually grew to over $7 million.
A Chief Justice who passed away in 1995, Warren Burger retired from the Supreme Court in 1986 and received the Presidential Medal of Freedom. Following a successful career, the former Chief Justice left behind an estate valued at almost $2 million. Burger created his own will that left clear instructions for his beneficiaries, but unfortunately he did not fully anticipate the estate taxes that would be levied. As a result, his heirs paid almost half a million dollars in estate taxes that could have been avoided with thorough and proper estate planning.
Known for his role as Tony Soprano in the critically acclaimed television serious The Sopranos, James Gandolfini passed away unexpectedly of a heart attack. The celebrity left a will dividing an estate worth approximately $70 million. However, the plan he created left only 20% of his estate to his spouse, creating serious tax liability that negatively impacted his entire family. The error led to the entire estate being hit with a $30 million tax bill that shrunk the value of his estate to $40 million dollars. Instead of sharing a $70-million-dollar estate, his beneficiaries were forced to divide a smaller estate after the IRS received almost half of the actor’s assets.
Get Estate Planning Help
Even those with moderate incomes can fall victim to expensive estate planning mistakes. The estate lawyers at MMZ Law understand how important it is plan properly to avoid costing your family dearly. We can work with you to create an estate plan that protects the legacy you intend to leave those who are closest to you. Contact us today to schedule an appointment at our Claremont, California office so that we can begin providing you with the legal representation you deserve.
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MMZ LAW, A PROFESSIONAL CORPORATION
341 W. 1st St. Suite 100
Claremont, CA 91711
MARIVEL M. ZIALCITA is the founder of MMZ LAW, A Professional Corporation, where she practices in the areas of Elder Law – Medi-Cal Planning Asset Protection, Trust & Estate, Special Needs, Conservatorship, Trust Administration, & Probate. Ms. Zialcita is a frequent speaker on trust and estate matters and holds memberships in the State Bar of California, Trust and Estate Section, The San Bernardino County Bar Association, Wealth Counsel and Elder Counsel. She currently assists in the pro bono legal services program at the James L. Brulte Senior Center in Rancho Cucamonga, California. She is based in Claremont but assists clients throughout Southern California.
This information is educational information only and not legal advice.