George Steinbrenner, owner of the New York Yankees, passed away today at the age of 80. While sad news for the family, there is a distinct upside for his heirs. By dying in 2010, he saved his family $600 million in estate taxes. Because of the inconsistent way tax laws are passed in this country, anybody who dies this year will not have to pay any inheritance taxes. This "Bush tax cut for the rich" is expected to expire on December 31, 2010. Next year the inheritance tax goes back up to 55% with a $1 million exemption. Some multimillionaire and billionaires who have died so far this year include Glen Bell of Taco Bell fame, Art Linkletter, and Dennis Hopper.
Though money can't buy love, we're talking about a LOT of money for some people. This has set up some moral dilemmas for families and their doctors. There are anecdotes of patients who might have died from terminal illness in 2009 who kept themselves alive until 2010 just to avoid paying taxes. DNR issues become more complex as money is introduced into the equation.
Congress is in no hurry to fix this bizarre tax law. Since this is an election year they don't want to correct the law and appear to favor "the rich". It's only July but incredibly they have less than 40 working days left this year before the election so any attempt to lower next year's estate tax rates appears futile. So watch as the billionaires drop like flies in December 2010. The Walton family, heirs to the Walmart empire, may suddenly decide to check out for good, not just in Aisle 23. Warren Buffet may succumb to all the cheeseburgers and cherry diet Coke he's been consuming every day. Bill Gates may "disappear" in his private jet over Africa on one of his humanitarian missions. You can't avoid death, but apparently for rich people they can avoid taxes at least for one year.