I read recently where Jamie Johnson an heir to the Johnson & Johnson fortune shared in his documentary “Born Rich” that he was clueless about the extent of his family’s wealth until a classmate told him (and the rest of his class) that his father was listed in the Forbes 400.
As copywriters well know when you reference learning in a headline readers’ interest tends to perk up. Add a mention to the “rich and famous” and you really generate interest. So “Lessons of the Rich and Famous . . . in Death” about estate planning caught my attention.
One of life’s certainties — taxes — is a little less certain in 2012. It’s increasingly unlikely Congress will address the expiring Bush tax cuts before the November elections. Instead the debate will be left to a lame-duck Congress or even pushed into 2013. That’s not great timing for tax planning.
Our ever changing tax laws seem perpetually riddled with sunset clauses. And that makes estate planning opportunities fleeting. For instance the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRA) increased the federal gift tax exclusion to $5 million.
I have previously written on my amazement that Congress allowed the estate tax to lapse last year and of the many plans put forth to reinstate the death tax.
Although agreement seemed highly unlikely just weeks ago Democratic support for a plan put forward by Republicans and accepted by President Obama seems to be gaining steam. The compromise in waiting would reinstate the estate tax at 35% for two years starting next year with the first $5 million of an individual’s estate exempted.
When the actor Gary Coleman died on May 28th at the age of 42 after suffering a brain hemorrhage he left three different wills–including one that was handwritten. Legally the last will written is the binding document. However battle lines have been drawn and it is likely his family and friends are in for a long court fight.
The recent death of two billionaires has thrust back into the spotlight the fact that Congress let the federal estate tax expire .
Legislators in Congress are reportedly considering creating a kind of Roth IRA version of the estate tax. “On The Money” a blog of the congressional newspaper The Hill recently reported that lawmakers are debating whether to let taxpayers opt to pay estate taxes in advance so their heirs owe nothing.