Wealth Preservation, Trusts and Estates

Some people are very skilled at making money and protecting what they make from taxes during their lifetimes. Now, some wealthy individuals can even manage to make/save money just based on their dates of death. George Steinbrenner, an amazing businessman and majority owner of the New York

Yankees, is the most iconic symbol of this death tax lottery system that Congress has allowed to come to fruition. Steinbrenner died on July 13th, 2010 and by doing so, managed to save his heirs an estimated $500 million in federal estate tax. Yes, that is One-Half of a BILLION dollars of savings because he did not die in 2009 (45% Highest Marginal Tax Rate) or 2011 (Expected 55% Highest Marginal Tax Rate). A HALF OF A BILLION DOLLARS is a mind numbing number and one that should resonate as we await a Congressional decision (or lack of decision) on what will happen to the federal estate tax in 2011 and beyond. Read this NY Post article outlining the federal estate tax savings for the Steinbrenner Family.

For those baseball fans reading this post, the Steinbrenner family will likely only retain its ownership interest in the Yankees because of the immaculate timing George Steinbrenner had even up to his date of death. Knowing Steinbrenner’s love for the Yankees, it should not be surprising that this would be his final act to preserve the family ownership.

By: DOUGLAS L. KAUNE, Esq. Please contact Doug at 610-933-8069 or dkaune@utbf.com. Doug is a Partner with the Law Firm of Unruh, Turner, Burke and Frees, P.C. Office locations in Phoenixville, Malvern and West Chester, PA and serving Chester, Montgomery, Delaware, Philadelphia, Bucks and Berks Counties in Pennsylvania.

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Although there there will likely be no federal estate tax in 2010, the beneficial “step-up” in capital gains tax basis on property owned by a decedent at death, is now limited to $1.3 million. The limited “step-up” may be allocated among the decedent’s assets by the Executor or Administrator unless otherwise directed in a decedent’s last will. As a result of the limited basis step-up, the heirs of a decedent dying in 2010 might owe capital gain taxes that they would not have previously owed. This process will be very challenging when having to sift through historical splits, mergers and dividend reinvestment. Read this article to learn more about the accounting nightmare that will result from these tax law changes. In reality, this may leave many heirs of estates that fall between $1.3 million through $3.5 million in 2010 paying more in capital gain taxes than would have been owed in estate taxes.

Please contact Douglas L. Kaune, Esq, at dkaune@utbf.com or 610 933 8069 to discuss your particular case and to determine how the federal estate tax laws of 2010 impact your planning.

Unruh, Turner, Burke & Frees, P.C. is a full service Pennsylvania (PA) law firm with offices in Phoenixville, Malvern and West Chester and serving surrounding areas such as Collegeville, Exton, Media, Norristown, Devon, Wayne, Royersford and Paoli.

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As we have discussed frequently, the Federal Estate Tax system is in a state of change in 2010. Frequently lost in the discussion of revocation of the Federal Estate Tax is the new Modified Step-Up In Tax Basis for Capital Gains. Prior to January 1, 2010 all capital appreciation assets owned by a decedent at the time of his or her death received a full step-up in basis. The new basis for those assets was the value on the date of death. Therefore, no capital gains had to be paid by the beneficiaries unless the inherited assets were sold for an amount in excess of the date of death value. The new law is much less forgiving and can open estate beneficiaries to a significant capital gains tax that was not previously a concern. Read about the 2010 federal estate tax and modified/partial step-up in tax basis rules by clicking the link here. Your estate planning should now include a comprehensive look at your capital appreciation assets to help insure the maximum capital gains tax protection for you and your beneficiaries.

Please fcontact Douglas L. Kaune, Esq. any time at 610-933-8069 or dkaune@utbf.com to discuss the appropriate planning to help protect your estate and the beneficiaries from a significant capital gains tax that might now apply.

Wills * Trusts * Elder Law * Probate * Asset Protection * Power of Attorney * Estate Planning
Unruh, Turner, Burke & Frees, P.C. is a full service law firm with offices in Malvern, Phoenixville and West Chester Pennsylvania (PA) also serving surrounding areas such as Newtown Square, Wayne, Media, Paoli, Valley Forge, Exton, Chadds Ford, Counties Served: Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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