Estate Planning Insurance Considerations

What Can Be Learned from Public Probate Records?

You may be interested in what the public probate records of the estates of businessmen, attorneys, entertainers, accountants and even a President have to show.

Name Gross
Estate		 Net
Estate		 Percent
Shrinkage
Franklin D. Roosevelt
 $ 1,940,999 $ 1,366,132 30%
Henry J. Kaiser, Sr.
 $ 5,597,772 $ 3,109,408 44%
Edwin C. Ernst, CPA
 $ 12,642,431 $ 5,518,319 56%
Robert S. Kerr (U.S. Senator, Oklahoma)
 $ 20,800,000 $11,300,000 46%
A.H. Wiggin (Chairman, Chase Bank)
$ 20,493,999 $ 5,646,666 72%
William E. Boeing
 $ 22,386,158 $11,796,410 47%
Rick Nelson
 $ 744,357 $ 506,636 32%
Elvis Presley
 $ 10,165,434 $ 2,790,799 73%
Rock Hudson
 $ 8,600,000 $ 3,926,288 54%
James S. Kemper (Insurance Executive)
 $ 10,948,356 $ 7,007,560 36%
Nelson A. Rockefeller
 $ 79,249,475 $56,727,628 28%
Conrad Hilton
$199,070,700 $93,288,483 53%
Source: Public Probate Records


If these people, who had access to the best advice money could buy, were not able to avoid the "unwanted heirs" (federal and state estate taxes an estate administrative costs), it will be difficult for the rest of us to avoid estate settlement costs.

There are, however, steps that can be taken...

The Federal Estate Tax

The federal estate tax is a progressive tax on the right to transfer property at death. In 2008, federal estate tax rates begin at 18% and increase to as much as 45% of the taxable value of an estate. Due to the estate tax unified credit, taxable estates valued at $2,000,000 or less in 2008 are exempt from the federal estate tax.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (2001 Tax Relief Act), signed into law by President Bush on June 7, 2001, made significant changes to the estate tax, but only for the period from 2001 through 2010:

Estate tax rates are reduced and exemption equivalents of the estate tax unified credit are increased for 2001 through 2009.

The Act then repeals the estate tax for 2010.

BUT...

The entire 2001 Tax Relief Act will automatically terminate, or "sunset," at the end of 2010 unless a future Congress takes action to extend its provisions.

This means that, under current law, the estate tax resumes in 2011, generally as it existed prior to the Act!

In general, the repeal of the estate tax for only one year in 2010 requires planning as if there will be no repeal.

Since the estate tax is progressive, and administrative costs grow with the estate, it is important first to consider the impact of the growth of your estate on the amount payable to your "unwanted heirs."

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