From all indications, in addition to taking the Yankees from the doldrums in 1973 to the most valuable sports franchise in history today, the Boss also did a good job of estate planning. We will discuss how George Steinbrenner planned the passing of the Yankee torch to his sons, Hal and Hank, in a future posting. Today, as reported by the Wall Street Journal, even the timing of his passing may have resulted in an enormous estate tax savings:
Because Mr. Steinbrenner died in a year when there is no federal estate tax, he potentially saved his heirs a 55% estate tax on his assets — or a tax bill of about $600 million. The 55% tax takes effect on January 1, 2011. If Steinbrenner had died in 2009 when the estate tax rate was 45%, his estate tax bill might have been nearer $500 million. Because the wealthy often do elaborate planning, putting assets into trusts taxed separately from the estate or into foundations that are tax-exempt, it is unclear how large his estate will be. Estate taxes may also be postponed on assets left to a spouse in years when there is an estate tax.
Steinbrenner is survived by his wife, Joan, two sons, and two daughters, plus two sisters and several grandchildren.
There is no estate tax this year due to changes made by Congress in 2001. Those changes eased the estate tax over several years and culminated with its repeal this year, followed by a return to high tax levels in 2011. Experts say few ever expected the tax’s repeal, and its 2011 reinstatement, would actually take effect. Instead they believed lawmakers would smooth out the tax rates at some point between 2002 and the end of 2009.
Congress never got around to it, and the tax lapsed this year. Many still hope lawmakers will fix this year’s law, which actually raises taxes on heirs of the merely affluent (with assets between $1.3 and $4 million). But they still haven’t acted and have little time to do so.