Estate Planning Savvy Gives Steinbrenner Trustee Room to Breathe
The will of Yankees owner George Steinbrenner, made public a few weeks ago by the New York Post, provides insight into how estate planning tools were utilized to minimize the impact of estate taxes on Steinbrenner’s estimated $1.1 billion estate.
Of course, none of us knows when or plans to die in a year where there are currently no estate taxes. But contingency planning for the “what ifs” is what ensures as many as your assets as possible pass on to your beneficiaries.
Steinbrenner’s will placed an undisclosed amount of his assets into a trust for his widow, Joan. It also provided his attorney and trustee with the power to decide exactly when that trust will pay federal estate taxes – either this year, or after Mrs. Steinbrenner dies.
The trustee has nine months in which to make that decision, and another six months on top of that to make the move permanent. The decision likely rides on whether or not the estate tax is enacted retroactively for 2010. If 2010 goes down in history as the year of no estate tax, then Steinbrenner’s estate wins big – to the tune of around $500 million. If the estate tax is enacted retroactively, the trustee may elect to defer payment until Mrs. Steinbrenner goes, at which time there may be a more favorable rate.
The benefit for now is time – to see how things play out in Congress and to have some breathing room to make the right decision for the Steinbrenner heirs. That is what savvy estate planning is all about.
