Steinbrenner's Final Business Move...

George Steinbrenner, the former owner of the New York Yankees, was always known for being a shrewd business man; however, his final business move may have been his finest. By dying in 2010 and therefore avoiding the Federal Estate Tax, Steinbrenner is estimated to have saved his family from paying an additional $500-600 Million in Estate Taxes, which were repealed in 2010 for the first time since 1916 when they were enacted.

"If you're super-wealthy, it's a good year to die," said Jack Nuckolls, an attorney and estate planner with the accounting firm BDO Seidman. "It really is."

The death of the 80-year-old Steinbrenner, who had been in poor health for years, highlights a quirky tax situation that has drawn much scrutiny among the moneyed but little on Main Street. Only those with estates valued at more than $3.5 million had to pay under the old law.

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This is the second case of a highly publicized individual "timing" their death perfectly as far as Estate Taxes are concerned. Dan L. Duncan, a Billionaire Pipeline Tycoon from Texas, who was worth an estimated $9 Billion, passed away earlier this year. Ranking as the 74th Wealthiest Man in the world by Forbes, it is estimated he saved his heirs (and cost America's Tax Collection Funds) billions!

The bonanza in tax savings for Mr. Duncan’s descendants is sure to be unsettling to those who have paid estate taxes on more modest wealth — until Jan. 1 of this year, it applied to any estate valued at more than $3.5 million, taxing only the money exceeding that threshold, or $7 million for a couple’s estate.

Although the tax affects only about 5,500 estates a year, it is such an incendiary issue that when Congress unexpectedly let it lapse at the end of 2009, financial advisers warned that it might play a macabre factor in the end-of-life decisions being weighed by heirs of elderly Americans. Some estate lawyers worried that tax considerations might prompt their clients to keep an ill relative on life support through the end of 2009 to get the favorable treatment — or worse, resist life-prolonging measures to hasten a relative’s demise before the end of 2010.

The one-year lapse in the estate tax was signed into law by President George W. Bush in 2001, an accounting quirk in his package of tax cuts. Although Democrats pledged to close that gap and reinstate a tax for 2010 when they took control of Congress, they failed to reach an agreement last December. The Senate Finance Committee is now trying to forge a compromise that would reinstate the tax, but even if that effort succeeds, it is unclear whether any changes might be retroactive and applied to those who have died so far in 2010.

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