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Death Tax: Estate planning to die for

Posted November 21, 2007

“In 2007, there are 482 billionaires in America. A record nine million U.S. households had a net worth of US$1 million or more in 2006. That number rose by 800,000 millionaires or 11% from the previous year.” — Bob Baumann

by Bob Bauman, Sovereign Society and TFN

Baltimore — (TFN): Someone once observed: “Death is more universal than life. Everyone dies but not everyone lives.”

Living a full life means different things to different people. But if you’re even modestly wealthy, an important component of a successful life is planning what happens to your wealth when you “shuffle off this mortal coil,” as Shakespeare wrote in Hamlet.

A senior U.S. Federal Reserve economist estimates that by 2050, the so-called U.S. “baby boom” generation will pass some US$41 trillion in assets on to their heirs. That’s the largest potential intergenerational wealth transfer in world history.

Forbes magazine estimates that in 2007 there are 482 billionaires in America. A record nine million U.S. households had a net worth of US$1 million or more in 2006. That number rose by 800,000 millionaires or 11% from the previous year.

But in contrast to these impressive statistics, many wealthy people I meet seem unprepared to pass on their wealth to their heirs. Perhaps the prospect of acknowledging their mortality blocks needed action.

Don’t Be Like Jack and Anna!

Jack Kent Cooke was a leading U.S. businessman in the 20th century. He grew rich in life, but created financial chaos in death.

The Wall Street Journal reported that when “…he died of a heart attack in April 1997, the 84 year old Mr. Cooke…had amassed a US$1.3 billion collection of media companies, sports teams and real estate. But he also left a convoluted will, amended eight times, that named seven executors…”

The dust finally settled seven years later, after numerous lawsuits and US$64 million in lawyers’ fees.

If ever there was another convincing case for prior estate planning, Anna Nicole Smith’s notorious death should be the clincher. She left behind a poorly drafted “last will and testament” for her young daughter, Dannielynn Hope. It’s a classic example why all of us should act now to avoid such a legal swamp.

A recent study examined travelers’ attitudes and behavior. The study concentrated on individuals from the top 5% of U.S. households with annual incomes of over US$150,000. The study listed these wealthy individuals’ tastes and meticulous demands. According to their findings, these wealthy travelers seem to know exactly what they want when it comes to service and comfort.

Read on…

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