Wednesday, July 28, 2010

If You're Rich, Watch Out for Greedy Heirs and Sharp Objects This Year

If you're rich

BE CAREFUL THIS YEAR AROUND GREEDY HEIRS.  There could possibly be some risk for your survival.

The U.S. estate tax this year is zero, so if you die or are killed during 2010, your heirs pay the government nothing on the money you pass along to them. 

This U.S. estate tax will return big time in 2011, and unless Congress extends, starting January 1, 2011, all taxable estates of more than $1 million will be taxed at pre-2001 rate of 55%.  

So estate tax will go from zero to 55% at the stroke of midnight on December 31, 2010.  (U.S. Congress might reduce the estate tax rate from 55%, but it won't eliminate it.)

Watch out for greedy heirs

Your heirs are smart and will know that if you die this year the U.S. estate tax is zero, and that if you wait to die until 2011, they will face a tax rate of about 50%.   OUCH!

and sharp objects

If you want to reduce chances of your dying in an unusual way or getting killed by heirs this year, consider this:

First:  If your only heir is your wife or husband, he or she can inherit everything without incurring any tax liability this year or next.

Second:  If there are heirs who might want to get rid of you this year, you should revise your estate plan to remove incentives for them to knock you off.

eliminate their evil incentiveArrange it so your heirs would get same amount of money if you die this year as compared with the next. 

Here's some protection:  Change your will, so that if you drop dead this year, the first 50 percent or more of the estate goes to charity.  Divide the remainder among your heirs.  Then on January 1, 2011, have your will revert to prior conditions and give copies of your will to each heir.
 
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Hah!  Just kidding ... unless of course you actually have heirs who would be that greedy. 

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Harrison K. Long
REALTOR and broker associate, Explore Group Properties, Coldwell Banker Previews
949-854-7747 - CA DRE 01410855 - www.LiveAtIrvine.com - www.NewportCoastLive.com - www.LiveAtNewportBeach.com - www.CostaMesaLive.com - www.LiveAtLagunaBeach.com - www.CoastLivingHomes.com - www.ExploreOCHomes.com  - www.LiveAtOrangeCounty.com  

Posted via email from Explore OC Homes

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