It is nearly the end of 2010 and there is still no new law in place regarding estate taxes. It is likely the estate of those individuals who died during 2010 will escape federal estate taxes regardless of the size of the estate. However, on January 1, 2011 the federal estate taxes will resurface and provide only a $1,000,000 exemption from the estate taxes and any amount over the $1,000,000 will be subject to a maximum tax rate of 55%. This means nearly every individual and married couple should implement an estate plan or review their existing estate plan to account for the change in federal estate taxes for 2011
Over the years famous people have taken time to plan and minimize estate taxes while others did not plan well. For instance:
Marilyn Monroe
1926-1962
Gross Estate $819,176, 21% shrinkage:
Settlement Costs: $ 20,000
Death Taxes: $154,384
Total Costs: $174,384
Conrad Hilton
1887-1979
Gross Estate $199,070,700, 51% shrinkage:
Settlement Costs: $ 798,836
Death Taxes: $100,565,479
Total Costs: $101,364,315
Walt Disney
1901-1966
Gross Estate $23,004,851, 21% shrinkage
Settlement Costs: $ 275,000
Death Taxes: $4,514,888
Total Costs: $4,789,888
J.P. Morgan
1837-1913
Gross Estate $17,212,482, 66% shrinkage:
Settlement Costs: $ 1,863,295
Death Taxes: $ 9,448,723
Total Costs: $11,312,018
More recently several celebrities have died with no estate plan, or an incomplete estate plan in place, such as:
Princess Diana, 1961-1997:
Dispute over vague terms of her Will
Trustees battling non-children beneficiaries for 25% of the $30,000,000 estate
Anna Nicole Smith, 1967-2007:
Bitter battle with her wealthy husband’s children
Legal fees in the millions
Raft of legal issues after her sudden death
Unclear whether she has an enforceable estate plan
After 15-year battle, a court found that her late husband was mentally fit when he signed off on the Will leaving $1.6 billion to his son
Michael Jackson, 1958-2009:
Set up the Michael Jackson Family Trust to keep the administration of his estate private
Forgot to fund the Trust
Multiple claims, counterclaims, lawsuits and royalty demands have been filed
Father wants $20,000 a month from the estate, even though he’s not a beneficiary in his late son’s Will
It remains a looming question as to whether or not there will be a new law passed to increase the federal estate tax exemption. Nearly every estate planner I know did not believe we would ever have a year without any estate taxes. Think of George Steinbrenner, New York Yankees owner, and his incredible estate tax savings for his family since he died during 2010. Forbes Magazine estimated his wealth in 2009 at $1.15 billion (http://www.forbes.com/lists/2009/54/rich-list-09_George-Steinbrenner_OJ49.html) . If he had died a year ago, 2009, his estate would have been subject to 45% federal estate tax, but since the estate tax has been repealed for one year-2010-Mr. Steinbrenner’s estate is not subject to federal estate tax.
We will post updates to our website www.falkbarrot.com, as well as our blog, as we receive information regarding any changes in the law, but Congress moves so slowly We will post updates to our website www.falkbarrot.com, as well as our blog, as we receive information regarding. Keep checking for updates.
