$500 Million Score for Steinbrenner Heirs

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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George Steinbrenner died today at age 80 -- an amazing bit of timing for his heirs. Like Texas billionaire Dan L. Duncan, death comes in the one year when no estate taxes are are due.

New York Yankees owner George Steinbrenner is working at his desk at Yankee Stadium in New York, before Game 2 of the World Series on Oct. 21, 1981. On the wall behind Steinbrenner is an autographed photo of Cary Grant.

/ AP Photo/File

You see, the 2001 Bush tax cuts included a peculiar twist:in tax year 2010, there would NO estate tax at all. That means Steinbrenner's $1.1 billion estate and Duncan's $9 billion estate could pass to their heirs without any federal tax. I'm sure that Red Sox fans are seething at this very notion (at least Big Papi won the home run derby!)

Considering that lawmakers have been aware of this issue since 2001, it's deplorable that they have done nothing to address it and have left families stuck in the fog for planning purposes.

I spoke with an estate attorney this morning who said that for the past couple of years, there was talk of setting the estate tax hurdle at $7 million for couples and $3.5 million for individuals, which was the 2009 level. But without legislative action, the estate tax repeal will "sunset", effective January 1, 2011 at which time the exemption amount for estates and gifts is $1 million and the the maximum rate for estate tax returns to 55%.

There's been talk about making any fix retroactive to the beginning of 2010, but the lawyer said that may be unconstitutional and more importantly, given how much money would be at stake (approximately $5 billion in taxes for Duncan and $500 million for Steinbrenner) the lawyers will fight this one for a long time. Then again, Uncle Sam has a lot to gain...and he sure could use the money, especially this year.

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(CBS)

Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

[newsterI]

That means Steinbrenner's $1.1 billion estate and Duncan's $9 billion estate could pass to their heirs without any federal tax"

Oh how "nice" I'm sure they need all $10 BILLION tax free, must be nice being born into an outrageously rich family with a silver spoon in your azz

[juded55]

My god - the man just died this morning. Show a little respect why don't you???

[newsterI]

No, he's dead, he doesnt carenow and cant read this

[eastwood816]

There was a Law & Order episode about family members killing off elderly relatives to avoid the death tax exemption before it expired.

Steinbrenner plays and coached college football.

A lot of people don't know that George Steinbrenner coached college football alongside iconic Ohio State football coach Woody Hayes and was actually part of a staff that won a national championship.

Google George Steinbrenner and Woody Hayes and you'll find some articles about it. A buddy just pointed it out to me this morning.