Wealth Transfer

If you have a life insurance policy, do you know who your beneficiary is?

The early and unexpected death of the actor James Gandolfini triggered another high profile estate planning disaster. Gandolfini who starred in the acclaimed HBO series The Sopranos from 1999 to 2007 died at age 51 after suffering a heart attack while vacationing in Rome.

As copywriters well know when you reference learning in a headline readers’ interest tends to perk up. Add a mention to the “rich and famous” and you really generate interest. So “Lessons of the Rich and Famous . . .

I have previously written on my amazement that Congress allowed the estate tax to lapse last year and of the many plans put forth to reinstate the death tax.

According to the Small Business Administration 90% of the 21 million US businesses are family owned. Amazingly less than one third of these companies will transfer successfully to the second generation and only 15 percent will survive by the third. Why the low survival rate? Most of these businesses lack a succession plan or an exit plan.

When the actor Gary Coleman died on May 28th at the age of 42 after suffering a brain hemorrhage he left three different wills–including one that was handwritten. Legally the last will written is the binding document. However battle lines have been drawn and it is likely his family and friends are in for a long court fight.

The recent death of two billionaires has thrust back into the spotlight the fact that Congress let the federal estate tax expire.