{3:06 minutes to read} On April 21, Prince (Rogers Nelson) died, leaving a $250 million estate. Because there was no will and no proactive estate plan, within 9 months Prince’s estate will have to come up with about $100,000,000 in estate taxes.

A couple of years ago, actor James Gandolfini passed away, leaving an estate of $90 million to his daughter. Gandolfini’s daughter was also on the hook for a huge chunk of her father’s estate to pay the estate taxes.
Whether James Gandolfini or Prince, there is a pattern here. It seems that many people just don’t take advantage of all the ways at their disposal for eliminating estate taxes. Many times when this happens, the estate doesn’t have adequate liquidity to pay the tax, so not only is the tax a huge amount, but often it is necessary to liquidate assets, such as real estate, businesses, royalties, etc., which can cause an additional onslaught of problems.

Prince could have chosen any number of avenues, especially in a situation like his, where there was no spouse. He could have availed himself of a:

  • Charitable bequest in his will;
  • Charitable Remainder Trust;
  • Charitable Lead Trust;
  • Life Insurance Trust;
  • Irrevocable Trust;
  • Defective Grantor Trust;
  • Loans to trust.
  • All of these wealth shifting ideas could have saved Prince and his estate literally hundreds of millions of dollars. While the estate taxes will not come out of his pocket, they will certainly come out of the pockets of his heirs.

    So whether it’s the late great actor James Gandolfini or Prince, everybody should be proactive in reviewing their estate plans every 2-5 years to make sure that they and their heirs are not going to be placed in a position like these very famous people.

    There’s a great saying I heard many years ago: “If you’re willing to plan a gift, the government is willing to forgive the tax.” The problem is that most people don’t take the time to plan their gifts and/or their estates, and that’s where we come in.

    If you’d like some help with estate planning, give us a call. We provide very comprehensive estate, insurance and financial planning reviews.

    Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS. Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

    Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

    Michael Fliegelman, CLU, ChFC, AEP, RFC
    Founder / President, Strategic Wealth Advisors Network
    (631) 262-9254
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    Brokerage Director, MassMutual


    Please note that the information being provided is strictly as a courtesy. Always confer with your CPA prior to attempting to take any tax deduction. Michael Fliegelman is not a CPA, nor should the contained be considered tax “advice”.

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