The Throw Momma From The Train Law

 

By: Robert S. Meyring*Attorney at Law
Some people earn their money, others are born into it, most have enough to just get by, and some have almost nothing or less - especially in this economy. Even so, it seems most Americans think there's a chance that they may have the luck or the ability to own or make millions even if by insurance, Lotto, or inheritance.  

The "Throw Mama from the Train Act" is the unofficial name, known in the trusts and estates law practice, for the Economic Growth and Tax Relief Reconciliation Act of 2001. The Act repealed the estate tax (or "death tax") for this year of 2010 and only for one year. So the nickname is a cynical reference to the perverse financial incentive built into the law. The law basically would "allow" the children of wealthy parents to receive all of their inheritance with no estate tax to pay the IRS if, and only if, the parent dies in 2010. 

To illustrate: Jane Bryant Quinn, financial columnist, commented on the Act, "In 2010, ailing parents will keep their bedroom doors locked when their children are in the house. It's going to be a great year to die."

Yes, the "death tax" is currently dead for one year; this year of 2010. Go Jane!

Here is how it works: If you or your parent passes away with $2 million or even $50 million this year, in 2010, the IRS would take no estate tax from the estate. None. But if the death occurs in 2011, the IRS death tax bill would be imposed on the estate after the first $1 million. In the case of $50 million, about $20 million of your legacy or inheritance would be lost, I mean, paid to the IRS.

What can you do? Doing nothing and not drawing up a will or trust is sometimes about the worst thing you can do. Call a trusts and estates or estate planner attorney. Do it for your family. There are many planning instruments that help prepare for the ever-changing laws that affect your inheritance. Don't let the IRS tax away your legacy. A little planning now could save millions later.

*The Meyring Law Firm offers free 10 minute phone consultations at 678-217-4369. The Firm's website at Willsquill.com has more articles, details, and planning forms. The office is located at the Vinings Jubilee at 29000020fefPaces Ferry Road, Atlanta.