While death is never a joke to those who suffer the loss of a loved one, for some time now estate planning professionals have been quick to quip that if you have a rich relative, 2010 would be the most convenient year for them to check out. With no Federal estate tax in 2010, wealthy folks stand to save their families more than 50 cents on the dollar by being gracious enough to pass on this year instead of waiting until 2011 when the tax returns full force.
The New York Times ran a story yesterday that clearly demonstrates this morbid fact. It is the story of Texas tycoon Dan Duncan who passed away a couple months back at the age of 77. Mr. Duncan was worth an estimated $9 billion, making him one of the richest men in the world. He left much of this fortune to his children and grandchildren. Had Mr. Duncan died in 2009, or in 2011, his family would have faced an estate tax bill in the billions of dollars. Instead, through the sheer happenstance of his dying in 2010, Mr. Duncan’s heirs did not have to pay not a single penny of federal estate taxes!
Somewhere in Washington DC an IRS big wig is shedding a tear at this lost “opportunity.”
The future of the federal estate tax is uncertain, but as 2010 drags on and we draw closer to election season, my expectation of Congressional action dwindles. I am starting to believe we may not see any of the “corrective” legislation that has been promised since mid 2009, and that we should expect the old estate tax laws to resurrect on January 1, 2011. At that point it won’t be just the billionaires who will be affected. The personal exemption amount will drop to $1 million per person and the tax rates will climb to a top rate of 55%.
Have you reviewed your Wills, trusts and estate plan to ensure you and your family will be ready for the coming change? Please don’t hesitate to contact me if you have any questions or concerns.
Finally, let me say that my thoughts and prayers go out to the family of Mr. Duncan. Their loss, and his worth as a man, a father, and a husband, no doubt far exceed any amount of money.
All the best,
Joe Donlon
The estate planning law firm of Donlon & Associates, PC provides high quality, focused legal counsel to clients all ages and wealth levels in the following areas:
Wills & Trusts
Asset Protection Planning
Advanced Planning for Business Owners & Professionals
Elder Law
Special Needs Trusts
Probate & Estate Administration
Donlon & Associates, PC provides trusts & estates and asset protection services to clients throughout New York City and Long Island, including Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and Staten Island.
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