2010 Is Good Year To Die - No Estate Tax

They say the only sure things are death and taxes. Well, the two are going together really well in 2010. Why? You can die and avoid paying the much hated estate tax.

There is an old saying that the tax rate for something is as high as the government has the nerve to go. With this in mind, it should be no surprise that the estate tax is traditionally one of the highest and nastiest taxes ever. Combined with state taxes, it has been as high as 80 percent in the past. Few complaints are heard because the dead don't complain and the living don't like to think about dying.

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2010 is shaping up to be a great year to die from a financial perspective. Why? The Bush tax cuts are expiring and Congress has not come to a resolution on what to do with them. This means that 2010 will be a year where there is no estate tax. Well, at least till Congress gets around to actually passing legislation on the subject. There are a number of bills moving through the Senate and House, but health care reform has everyone's attention.

Obviously, the suggestion that you try to die in 2010 for tax purposes is a tongue in cheek suggestion. It does, however, highlight a simple fact. If you have an estate that totals more than $800,000, you need to do some financial planning. That may sound like a lot of money, but it really isn't when you consider all of your assets from a tax perspective. You'll need to include the value of your home, retirement account and life insurance. Many people buy $500,000 to a million dollars in insurance. This alone can put you over the cusp and result in a nasty tax bill.

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Don't think so? Well, consider some of the big asset situations over the year. The O'Malley family owned the Los Angeles Dodgers for years. Then they sold the team out of the blue. The reason? They forecast that there was no way to pay the estate taxes that would be due when the patriarch of the family passed away. The same thing happened with the Miami Dolphins.

Estate tax is just about as punitive a tax as there is when it comes to the Internal Revenue Code. Dead men may tell no lies, but they certainly pay taxes. Well, not in 2010.

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