The Dan Duncan Legacy: Death, No Taxes
Houston billionaire Dan L. Duncan became the unwitting poster child for the 2010 estate tax lapse when he died in March, allowing his $9 billion fortune to pass to his children and grandchildren tax-free.
Had he died three months earlier, his estate would have been poorer by 45 percent – in other words, that’s $4 billion the U.S. Treasury did not collect because of no estate tax in 2010.
This year is the first since 1916 when there has been no estate tax. The estate of America’s first billionaire, John D. Rockefeller, was taxed at a rate of 70 percent upon his death in 1937.
The history of estate taxes in the U.S. goes back to the Stamp Act of 1797, which required a federal stamp on wills in probate. Revenues were used to pay off war debts. The Stamp Act was repealed in 1802, but several more sporadic estate tax laws were enacted over the next century to help finance wars. When the wars ended, the acts were repealed.
The Senate Finance Committee is currently working on a compromise to reinstate the federal estate tax, and it still remains clear whether or not it will be made retroactive and applied to estates like Duncan’s.
One thing most estate planning attorneys agree on: the Duncan family has a vast war chest to fund a constitutional challenge to any retroactive tax.
If you need more information about business exit strategy planning, contact our Jacksonville Florida estate planning law firm.
