Preparing for The New Estate Tax
http://wfplaw.com South Florida, it would be a good idea to prepare now for the return of the death tax. In 2010, the dreaded death tax was replaced by a capital gains tax in an attempt to get more money from owners of real property and stocks with very low cost basis. In 2011, the estate tax will return with a vengeance. The level at which all estates will be taxed at will be a measly 1 million dollars. A million dollars may sound like a large amount of money but it is really quite small when you consider that it includes life insurance proceeds, the value of your home, stocks, bank accounts, retirement accounts, jewelry, paintings, and anything else that you may have had titled in your name at the time you died. After all of your assets are probated and given a fair market value dollar amount, your family will be taxed at 55 percent for everything over the first million. That means that they will be forced to pay 55 cents to the government for every dollar you left to them. This tax has bankrupted families. When Joe Robbie died, he left the Miami Dolphins and the stadium they played in (formerly known as Joe Robbie Stadium) to his children. He did not have a trust in place at the time he died. Since he owned all of his assets in his own name at death, the team and the stadium were probated and nine months after his death, his children were handed a $50 million tax bill. Almost all of Joe Robbie’s net worth was in the team and the stadium so the kids couldn’t come up with the cash. The government had no interest in being a partner in a football team so the Robbie kids were forced to sell the team and the stadium for 50 cents on the dollar just so they could pay the tax bill. A lack of estate planning is the reason that the Dolphins now play in Sun Life Stadium. A similar situation took the Cubs away from the Wrigley family. When the estate tax bill came due, the Wrigley kids were given the option of selling the chewing gum factory or the baseball team. Since chewing gum is more profitable, they sold the team to pay the estate tax. The estate tax doesn’t just affect millionaires; it also has taken many a farm from the unsuspecting and unprepared farmer. Many farms are worth 7 or 8 million dollars but the men and women that run them live month-to-month and hardly consider themselves to be millionaires. A lack of life insurance and estate planning leads to the common occurrence of a farmer dying and leaving the farm to his family. Along with the farm, he leaves them an estate tax bill of around $4 million. Since the kids can’t pay the bill, they are forced to sell the farm. A lack of estate planning could lead to the financial destruction of your family. You work very hard during your life so that you might provide for your family and maybe leave them a little something after you are gone. Don’t let the death tax take it all away. You can protect your family with some very basic estate planning techniques. To learn more about protection your family from the looming death tax, and to schedule your free estate planning consultation, please contact the estate planning attorneys of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com. Let us protect what you value most.
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