Death Without Taxes
Posted on Jun 10, 2010
According to Benjamin Franklin, "the only things certain in life are death and taxes." For those who die in 2010 there is just death and no taxes, at least federal estate taxes. Recently, Dan L. Duncan, a Texas pipeline tycoon, likely became the first billionaire allowed to pass on his entire $9 billion estate to his children and grandchildren. If he had died in 2009, he would have been subject to a federal estate tax of at least 45 percent. If he held on until 2011, the rate would likely be 55 percent. What is so special about 2010? Congress allowed the tax to lapse for this year. The size of estate subject to federal estate taxes has been increasing over the last decade and Congress had intended to set size limits prior to this year but, so far, Congress has failed to reach an agreement. Some speculate that Congress will try to make new limits retroactive to this year. Any such efforts will likely be met with legal challenges. (There is at least one Texas family with significant funds to devote to defeating a retroactive tax.) Most of us expect to last beyond this year, and, regardless, one may still have to reckon with state estate taxes. Accordingly, estate taxes (aka "death taxes") are best minimized or avoided through proper estate planning.
