Death and No Taxes
By Lynn Ashby 21 June 2010
My first indication of the changing situation was when my children started inquiring about my health. “How ya feelin’ today, Dad?” asked the eldest. “You look a little tired, Daddy,” said my daughter. Another son e-mailed me: “Is your medication kicking in? Just asking.”
They had never been so concerned before, not even when I passed out and was run over by a Mardi Gras float, or when I was wounded at Khe Sanh saving my commanding officer. After the mistaken obit appeared in the paper, my wife showed up for the funeral, but the kids only sent flowers. So what gives?
Next I noticed my daughter wandering round the house with a clipboard, putting little tags on the furniture. In some cases she took photographs. Then I got an e-mail: “Dad, the safety deposit box is at the Left Bank of the Bayou, right?” And another: “What’s the PIN number for your ATM account? I’m playing Trivial Pursuit.” My son the lawyer wanted to update my will.
It certainly was nice that my offspring suddenly became concerned over my health. Then I spotted a newspaper headline: “Legacy for One Billionaire: Death, but No Taxes.” The article began: “A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free.” Hey, we all knew George W. took care of his rich Texas oil buddies, but no taxes at all?
After reading further, I discovered the situation isn’t quite that blatant. What happened was in all the Bush tax cut maneuvering, the law he finally signed contained an accounting quirk: no estate taxes for 2010. The Dems vowed to close that gap when they took control of Congress, but they failed to reach an agreement last December.
Enter – or depart — Dan L. Duncan, the richest man in Houston. A poor East Texas boy with only a business school education, he got into the gas pipeline biz and knew how to make money. Forbes magazine estimated Duncan’s worth at $9 billion, ranking him as the 74th wealthiest person in the world. In March, at age 77, he died of a brain hemorrhage. Had he died last Dec. 31, his estate (or death) taxes could have been at least 45 percent. On the other hand, if Duncan had lived past next New Year’s Eve, the rate could be even higher — 55 percent, although many changes are being discussed. Don’t complain. When John D. Rockefeller, America’s first billionaire, died in 1937, his estate paid 70 percent. Oddly enough, today two billionaires are main supporters of the estate tax: Warren E. Buffett and Bill Gates.
The was enacted in 1916, and since then the rates have fluctuated, but this is the first time the tax has been repealed entirely. Before last New Year’s Day, any estate worth more that $3.5 million — or $7 million for a couple’s estate — was taxed beyond that amount. With all the screaming about the tax, we’d think it applied to millions of departing Americans, but actually the tax affects only about 5,500 estates a year. In 2008, the most recent year for which data is available, that came to $25 billion. Spouses can inherit any amount without limit — Duncan left his home and ranch to his wife along with stock valued at hundreds of millions of dollars. But Duncan’s estate beneficiaries are subject only to a capital gains tax which is far less than the normal estate tax.
Oh. I get it. So that’s why my brood is so inquisitive about my health. They know that if I croak before the next Cotton Bowl game or the ball drops in Times Square, which ever comes first, they get my vast fortune with no estate tax. This also explains last year why they were so intent on my good heath. All of 2009 they kept inquiring about my cigar-induced cough, my vodka-based crawling. “Keep Lynn till ’10,” must have been their mantra. Throughout the calendar year of 2009 they no doubt had life-support systems at the ready to keep me comatose if not frozen. But with the stroke of midnight on Dec. 31 last, it was open season on Daddy.
Maybe I should get a bodyguard who doubles as a food taster. I’ll drive home a different way each evening. Father’s Day, my birthday and Christmas should be called off this year. Those packages might tick. I must be careful of any delivery from Acme Napalm Co. or Shrapnel R Us. Look both ways before crossing the minefield. Avoid leper conventions. No, I’m not paranoid, just careful.
Wait a minute. Why can’t the hunted become the hunter? Maybe I can take a page out of “Kind Hearts and Coronets” and dispose of my relatives one by one until I hit the family jewels? Uncle Waldo has that big company and probably is sitting on a fortune, if his fourth wife didn’t take it all when she left Waldo for the Green Bay Packers. Maybe at the next Labor Day family picnic I can bring him some potato salad that I inadvertently left in the sun for three hours.
There was always the rumor that Cousin Crabgrass was Howard Hughes’ illegitimate son. I could give Crabgrass new Kleenex boxes for Christmas and tie the shoelaces together. Then there is Grandpa Spindletop. He was named for his father’s best friend who had something to do with oil and died childless. Gramps, mind if I borrow your pacemaker?
Hold everything. The news story says during his life Duncan gave away millions to charities, medical research, museums and foundations. I don’t actually give away millions, more in the low $3-$4 range. Annually. Now the phone is ringing again. It’s an offspring. “Dad, you just accidentally faxed me your last IRS return. It’s sort of depressing reading, If I go first, should I leave you something in my will?”
Ashby is hiding out at email@example.com