By dying in 2010, George Steinbrenner, the billionaire and long-time New York Yankees owner’s wealth avoids the federal estate tax altogether.
Steinbrenner’s death Tuesday came during a year-long gap in the estate tax, the first in its history. As a result, the government does not collect billions of dollars in annual estate tax revenue. For those who inherit wealth, getting it tax-free is fantastic. A probate may still be required if any of the property was in California.
“If you’re wealthy, it’s a good year to die.” Forbes magazine has estimated Steinbrenner’s estate at $1.1 billion. The federal estate tax in 2009 was 45 percent, with the $3.5 million per-person exemption. If he had died last year, his estate could have faced federal estate taxes of almost $500 million, depending on how the estate was structured.
Remember, in California, just because you don’t owe the IRS any estate tax, your estate may still go through probate before your heirs can receive their inheritance. Moreover, the estate tax will likely come back. Call a qualified estate planning attorney to discuss avoiding probate and minimizing estate tax with a living trust. Call Mitchell A. Port at (310) 559-5259.