Steinbrenner - 4th Billionaire to Die in Year of No Estate Taxes
George Steinbrenner, owner of the New York Yankees, died today. As so aptly stated by Forbes.com, "Steinbrenner's death was well timed for the estate tax." As we've discussed before , there is no estate tax currently in force for 2010. Steinbrenner is the 4th billionaire to die this year, so far. (Others include: Dan L. Duncan, Texas oilman with $9.7 billion estimated net worth; real estate mogul Warren Shorenstein with $1.1 billion net worth; Mary Jane Morse Cargill with $1.6 billion estimated net worth.) Steinbrenner's estimated net worth is $1.1 billion. Collectively, those four estates alone could have generated about $6 billion of estate tax revenues for the U.S. Treasury based on the estate tax in effect in 2009, or what is scheduled to be in effect for 2011. Too bad Congress has been so totally dilatory with their real responsibilities.
Look for more high net worth deaths in 2010. The weekend edition of the Wall Street Journal's article "Too Rich to Live?" notes that the "estate tax is set to come roaring back in January. That sets the stage for a perverse calculus: End it all — or leave a massive bill for your heirs to deal with." The WSJ article sums it up very succiently and clearly. At midnight December 31, 2010, the estate tax is resurrected (unless Congress acts before the end of the year - and at this point practically no one expects any action). The maximum estate tax rate jumps to 55% and there will be only $1 million per person allowed to be exempt from the tax. The example used by the WSJ says it all:
The math is ugly: On a $5 million estate, the tax consequence of dying a minute
after midnight on January 1, 2011 rather than two minutes earlier could be
more than $2 million; on a $15 million estate, the difference could be about $8
million.
The really unfortunate thing about Congress' inaction is that tens of thousands of families who have engaged in solid estate planning over the past several years may not realize the impact the "new" estate tax will have on their loved ones. Last year (2009) the exemption for each person was $3.5 million. A married couple could shelter a collective $7 million from estate taxes. Beginning January 1, 2011 that number drops to $2 million. There are tens of thousands of families in America with a net worth between $2 million and $7 million who have been lulled into the belief that they have no concerns with estate taxes. They don't realize that additional planning will be needed to continue to shield the difference between the $7 million that could pass estate tax free last year, and the $2 million that will be allowed to pass estate tax free starting January 1, 2011.
Those tens of thousands of families who will be impacted will end up paying hundreds of thousands to millions of dollars in taxes they won't be expecting. Literally billions of dollars will flow from the families of small business owners, farmers, ranchers, and professionals into the U.S. Treasury, unexpectedly. If the economists are concerned about a "double-dip" recession, look out for the impact on the economy from the loss of half the wealth of those tens of thousands of "wealth creator" small business owners!
It really is absurd that Congress has been unable to find agreement on a single plan for the estate tax. For the benefit of all America, both the House and the Senate must find some way to compromise on a new estate tax bill, if for no other reason that to give the American taxpayer the ability to plan for and estate tax that is known with some certainty. Come on Congress, get your act together for once!!
For those people who have more than $2 million net worth, it will be very worthwhile for you to consult with your estate planning professionals between now and the end of this year to determine whether there are options for you to pursue to reduce or eliminate the impact of this change on you and your family.
Look for more high net worth deaths in 2010. The weekend edition of the Wall Street Journal's article "Too Rich to Live?" notes that the "estate tax is set to come roaring back in January. That sets the stage for a perverse calculus: End it all — or leave a massive bill for your heirs to deal with." The WSJ article sums it up very succiently and clearly. At midnight December 31, 2010, the estate tax is resurrected (unless Congress acts before the end of the year - and at this point practically no one expects any action). The maximum estate tax rate jumps to 55% and there will be only $1 million per person allowed to be exempt from the tax. The example used by the WSJ says it all:
The math is ugly: On a $5 million estate, the tax consequence of dying a minute
after midnight on January 1, 2011 rather than two minutes earlier could be
more than $2 million; on a $15 million estate, the difference could be about $8
million.
The really unfortunate thing about Congress' inaction is that tens of thousands of families who have engaged in solid estate planning over the past several years may not realize the impact the "new" estate tax will have on their loved ones. Last year (2009) the exemption for each person was $3.5 million. A married couple could shelter a collective $7 million from estate taxes. Beginning January 1, 2011 that number drops to $2 million. There are tens of thousands of families in America with a net worth between $2 million and $7 million who have been lulled into the belief that they have no concerns with estate taxes. They don't realize that additional planning will be needed to continue to shield the difference between the $7 million that could pass estate tax free last year, and the $2 million that will be allowed to pass estate tax free starting January 1, 2011.
Those tens of thousands of families who will be impacted will end up paying hundreds of thousands to millions of dollars in taxes they won't be expecting. Literally billions of dollars will flow from the families of small business owners, farmers, ranchers, and professionals into the U.S. Treasury, unexpectedly. If the economists are concerned about a "double-dip" recession, look out for the impact on the economy from the loss of half the wealth of those tens of thousands of "wealth creator" small business owners!
It really is absurd that Congress has been unable to find agreement on a single plan for the estate tax. For the benefit of all America, both the House and the Senate must find some way to compromise on a new estate tax bill, if for no other reason that to give the American taxpayer the ability to plan for and estate tax that is known with some certainty. Come on Congress, get your act together for once!!
For those people who have more than $2 million net worth, it will be very worthwhile for you to consult with your estate planning professionals between now and the end of this year to determine whether there are options for you to pursue to reduce or eliminate the impact of this change on you and your family.
Posted by Randy Coleman at 7/13/2010 10:16 PM 
Categories: estate planning,estate taxes
Tags: estate tax estate planning
Categories: estate planning,estate taxes
Tags: estate tax estate planning
Paging Dr. Jack Kevorkian. He will be busy this year.
This will discourage saving and investment, suppress productivity and wage growth, reduction in wealth creation, and interrupts/hurts our American way of life. Even if you own land this will hurt. Why in the world they would do this now when the economy is taking body blow after body blow is beyond me. Fools!
It never ceases to amaze me that progressives and liberals believe in higher taxes and spout the rhetoric “tax the rich,” but they are the ones always caught cheating or evading taxes and sheltering their money most often. What a bunch of hypocrites. We know where these people go in the afterlife and I hear it is very hot there.
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