On January 1, 2010 the federal estate tax disappeared. While every tax-minded person out there, myself included, assumed Congress would step in and reinstate it, that just didn’t happen. So, when Texas billionaire, Dan Duncan, died in late March, his entire $9 billion estate passed on to his family, tax-free.
Had he passed three months earlier, his estate would have been subject to 45% federal estate tax. Had he lasted until 2011, that estate tax would have gone up to 55%. But, since Congress allowed the estate tax to lapse for one year, his heirs will receive the whole kit and caboodle without Uncle Sam getting a cut.
Rumors that Congress will instate a retroactive estate tax continue to circulate. With enormous deficits and historically low tax revenues, the government loathes missing out on the billions of dollars Mr. Duncan’s estate would have produced. However, Mr. Duncan’s heirs certainly have the financial means to battle any such law’s constitutionality in court.
No one knows what Congress will do at this point. To read more about Mr. Duncan and the estate tax, read the full article here.