"Houston gas pipeline mogul Dan Duncan was the 74th richest person in the world when he died on March 28. If he’d passed away three months earlier or ten months later, his $9 billion estate could have generated up to $4 billion for the IRS. But because there’s no federal estate tax this year, the government gets nothing," writes editor Scott Martin in The Trust Advisor Blog here. Thanks to Justin Hill of Addis & Hill in Wayne for linking us up.
Martin continues: "As the first billionaire to die in this year without an estate tax, Duncan presents a tempting opportunity for a revenue-strapped Congress to follow through on threats to reinstate the tax for 2010 and possibly even make it retroactive to the beginning of the year.
"However, probate gurus say the sheer amount of money on the table makes a retroactive tax more unlikely. Big estates mean big lawyers ready to fight to see those billions of dollars go to the deceased’s heirs, and the headaches could go on for years... Movers and shakers in Washington agree that the hole in the estate tax has got to be fixed, but nobody can agree on how to do it.
"If nothing happens, the tax will reset in 2011 with an exemption of $1 million and a maximum rate of 50%. That would make a lot of upper-middle-class voters unhappy...
"Late last year, the House approved an eleventh-hour plan to keep the tax alive in 2010 under the 2009 rules, which impose a maximum 45% tax rate on estates worth over $3.5 million. But the bill went nowhere in the Senate... It’s theoretically possible that gridlock and inertia will leave the door open for more billionaires to leave tax-free estates this year."