America is getting older. Every year, baby boomers are inching closer and closer to retirement age. As these baby boomers age, they need to consider estate planning issues. While the loss of a loved one is never an easy thing to face, waiting to plan for a person’s death can have detrimental effects on a person’s estate. Without the right strategies, Michigan residents may end up dealing with negative tax implications or end up in long drawn out legal battles.
Take for example famous Michigan resident William Davidson. Davidson was a successful business owner, sports team owner and member of the Basketball Hall of Fame. In 2008, his fortune was an estimated $5.5 billion and he was listed as one of the richest people in the world. He died in 2009.
Nearly four years after his death, his estate is still not settled. His estate administrators are still entrenched in a legal battle with the IRS over the amount of taxes the estate owes the government. According to the IRS, the estate owes at least $1.9 billion more in taxes. The IRS is claiming that certain stocks in the estate were undervalued and that certain large gifts had not been included in the estate. Recently, the estate filed suit claiming the IRS has wrongfully calculated more than $2.8 billion in taxes. This case could be in the courts for some time.
This case is important because it shows how difficult and lengthy estate disputes can be. While most people will not be dealing with the amount of assets this case has, they will have to deal with the tax implications of their loved ones’ death. With proper planning, many of these issues can be avoided and families will be able to preserve assets as much as possible.
Source: Accounting Web, “Death Tax Grasps for More of William Davidson’s Wealth,” Teresa Ambord, July 25, 2013