It feels like it’s been a while since any of us at Jeffrey Burr, Ltd., have posted anything about the 2010 estate tax repeal. It could be because there’s still not much to say, aside from speculation, about what the future may hold for the federal estate tax. I know that we’ve made a conscious effort to stay away from the topic in fear of boring our loyal followers … “Gee whiz, another post on the estate tax repeal!”
This week’s death of George Steinbrenner, the owner of the New York Yankees, is a reminder of the impact of the repeal to those with extra-large estates. According to the New York Times, Mr. Steinbrenner’s estate is reportedly worth an excess of $1.5 Billion. Nobody aside from his family and their professional advisors really know what planning may have done to help prepare for what was a great potential estate tax bill. Nevertheless, if nothing was done, Mr. Steinbrenner would have had an estate tax bill of nearly $700 Million, had he died in 2009, and the liability would be even greater in 2011 with the potential tax rate reaching 55%.
You and I may have already had this thought, but Sen. Jim Bunning (R-KY.) put actual words to the thought and made the following statement today regarding George Steinbrenner’s death: “Because he was smart enough to die in 2010, there is zero tax liability on the estate tax…” (The Hill.com). Apparently the comment was made during a Senate Finance Committee hearing on the expiring Bush tax cuts which includes the unexpected repeal we are experiencing today in 2010.
For the rest of us that are not ship-building and sports-team billionaires, we can still take a moment to audit whether our current estate plans are in proper order for 2011 to arrive. Most plans drafted during the Bush tax cut years probably have the proper language allowing for credit shelter trusts, etc. But the planning was probably conceived based upon higher exemption rates; therefore, additional planning may be necessary to ensure that your estate pays the lowest amount of tax possible.
-Attorney Jason Walker