Dan L. Duncan Will Be First American Billionaire to Pass Billions to Children and Grandchildren Tax-Free
June 10, 2010
It looks like the estate tax-free year 2010 is benefiting the heirs of Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, who became ranked on Forbes magazine as the 74th wealthiest man in the world. According to an article in the New York Times by David Kocieniewski, if he died last year the estate would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher - 55 percent.
Because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan's four children and four grandchildren stand to collect billions that in any other year would have gone to the U.S. Treasury.
The Treasury collected more than $25 billion in estate taxes in 2008. Given the huge deficit, and the state of the U.S. economy, Congress cannot be too happy about the situation. Duncan's heirs can thank President George W. Bush who signed the law into effect 2001.
While very occupied on other pressing issues, the Senate Finance Committee is trying to come up with a solution. According to the Times article, "it is unclear whether any changes might be retroactive and applied to those who have died so far in 2010." Of course, heirs of anyone who died this year will not be likely to take such news without putting up a fight.
Since estate taxes are a major part of overall planning we will keep you informed on how this develops.
For more information, please contact your Perelson Weiner partner.