Government Affairs
Death Taxes Should Take From the Wealthy; But How Much? The Story of Tina and Pat Brown
Tina was 38, brilliant, beautiful, and a caring American who loved life. She lived some of her life in Germany and obtained a degree in German literature. Tina met her husband in Germany, but they moved to the United States and took up residence in California. Life was good, but then she was diagnosed with ovarian cancer! Tina tried many treatments, but none cured her cancer. Once she knew that her time was short, she was told even more bad news! If she did not want the assets that she had been recently gifted from her grandfather to be taxed at a 55% rate of tax, she could not let her German citizen husband be the trustee of her assets. Tina would have to appoint an American citizen to be a trustee. You see, Tina's husband wanted to be an American, but he was still undergoing the residency process when she took ill. She had to appoint someone else to be the trustee and that required new trust documents, attorneys and notaries at her deathbed. Tina's feelings were "why am I dealing with this, I am going to die", "why do I have to sign trust documents at a time like this". Tina died after complying with the death tax laws, spending her last weeks and days doing something that she hated to do even when she was alive.
Pat was Tina's mother. She had to watch her daughter die at the young age of 38. Pat had three other children she loved and to whom she gave her attention, but 5 years after Tina's death, Pat was stricken with lung cancer. Even though she had done her best to divest herself of her assets by donating to over 70 different charities on an annual basis, she still had substantial assets from the business that her father and mother built. Being a planner, Pat decided to make sure that everyone was taken care of in the event that she did not survive the cancer. She began by contacting her business manager and giving away 50% of her assets to charity and fine tuning her estate plan. Unfortunately, she only lived three months more and 9 months after her death a very large check was written to the federal government to pay the death taxes. Assets had to be sold and her three surviving children spent months winding up her estate to file a 6-inch thick final tax return. But that was not enough pain. Her children were then notified that her estate would be audited and that one of the issues under investigation was whether their mother had engaged in "deathbed planning". The IRS wanted to know what percent chance of living did Pat's doctors tell her that she had and what did she believe. The IRS wanted to depose the children to ask them to what extent did their mother know that she was going to die. After a 4-year audit, at a cost in excess of $250,000, the IRS concluded that no adjustments were necessary to the final tax return as filed. How much should one family have to endure? Families work hard, build businesses and create jobs. Why at death should they be penalized for doing that? The Death Tax needs to die. Contact:Patricia M. Soldano
President of Policy and Taxation Group
Website: http://www.policyandtaxationgroup.com/
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