2010 - The Best Ever Year To Die
publication date: Jul 9, 2010
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author/source: Neil Gillespie - Shamrock Growth Associates
If you have any net worth over $1 million and you're in poor health, maybe
it's time to pack it in before December 31.
Well, not really, but the financial implications of dying after New Year's day are dire for estate owners leaving more than $1 million net worth behind.
Let's say an older person or person with a terminal illness has 10 million in net worth, and it is all tied up in the business. If they pass away this year, there are no taxes on their estate. If they passed away last year, they would have owed about 45% on everything over $3.5 million.
Obama's plan is to go back to a mere $1 million exemption and a 55% tax rate for 2011. So a $10 million net worth estate would owe 55% of $9 million.
"How could that be?" you ask. That sounds ridiculous! Listen, nobody thinks they're going to die, either UNTIL IT HAPPENS!
So your business is already suffering a bit and cash flow is dear, right?
What if dear old Mom passed away and Dear old Dad does too... but next year? A business with $10 million net worth will have a sudden tax bill of over $4.5 million. A business with $5 million net worth will owe over $2.5 million.
That effectively ruins any chance of family business succession. If you can't sell your business, you walk away with nothing, and the IRS owns it. You also have to be careful of your PARTNER's situation, too. If your partner is a surviving spouse and has no complicated trusts to protect their net worth, you had better have a hefty key man insurance policy on him or her. Because if he or she dies, their family is going to need to sell their share of the business to pay the taxes. You better have done something to come up with the money if your partner kicks the bucket in 2011 or after.
Brought to you by the same crew that brought you the bailouts.
Just be comforted to know that the same government that redistributed your tax dollars to a failing General Motors and a bunch of irresponsible bankers will be doing the same with your hard earned money that the Bible says you ought to be able to leave to your heirs. Sobering thought, huh?
I don't know about you, but I'm getting the feeling that the government wants to milk the net worth out of individual business owners forever and change our society into a total corporation-government collaboration that gives handouts to a controlled serfdom - US. (I think they call that - Fascism?) Think about everything that has been going on to suck the wealth out of the independent business person. Bad enough the economy is terrible Now THIS.
Come November 2010 and 2012, will you know what to do?
Rattle your congressman's cage. Or watch the suicide stats closely come December 2010.
Well, not really, but the financial implications of dying after New Year's day are dire for estate owners leaving more than $1 million net worth behind.
Let's say an older person or person with a terminal illness has 10 million in net worth, and it is all tied up in the business. If they pass away this year, there are no taxes on their estate. If they passed away last year, they would have owed about 45% on everything over $3.5 million.
Obama's plan is to go back to a mere $1 million exemption and a 55% tax rate for 2011. So a $10 million net worth estate would owe 55% of $9 million.
"How could that be?" you ask. That sounds ridiculous! Listen, nobody thinks they're going to die, either UNTIL IT HAPPENS!
So your business is already suffering a bit and cash flow is dear, right?
What if dear old Mom passed away and Dear old Dad does too... but next year? A business with $10 million net worth will have a sudden tax bill of over $4.5 million. A business with $5 million net worth will owe over $2.5 million.
That effectively ruins any chance of family business succession. If you can't sell your business, you walk away with nothing, and the IRS owns it. You also have to be careful of your PARTNER's situation, too. If your partner is a surviving spouse and has no complicated trusts to protect their net worth, you had better have a hefty key man insurance policy on him or her. Because if he or she dies, their family is going to need to sell their share of the business to pay the taxes. You better have done something to come up with the money if your partner kicks the bucket in 2011 or after.
Brought to you by the same crew that brought you the bailouts.
Just be comforted to know that the same government that redistributed your tax dollars to a failing General Motors and a bunch of irresponsible bankers will be doing the same with your hard earned money that the Bible says you ought to be able to leave to your heirs. Sobering thought, huh?
I don't know about you, but I'm getting the feeling that the government wants to milk the net worth out of individual business owners forever and change our society into a total corporation-government collaboration that gives handouts to a controlled serfdom - US. (I think they call that - Fascism?) Think about everything that has been going on to suck the wealth out of the independent business person. Bad enough the economy is terrible Now THIS.
Come November 2010 and 2012, will you know what to do?
Rattle your congressman's cage. Or watch the suicide stats closely come December 2010.
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