We recently lost the popular entertainer Dick Clark. Though his persona was etched into the American consciousness years ago when he hosted the American Bandstand television program, he had his hands in many enterprises over the years. In recent times, many of us have looked forward to his hosting of the annual New Year’s Eve celebration on Times Square in New York.
Depending on the way that he planned things out, the estate of Dick Clark is potentially going to be subject to the federal estate tax because it is estimated to be valued in the hundreds of millions of dollars. This year, the estate tax exclusion is $5.12 million and the top rate is 35%. So, if no tax efficiency strategies were employed, everything over $5.12 million would be subject to this 35% levy.
Ironically enough, the New Year’s Eve festivities are quite relevant to estate planning this year. The laws are going to change when 2013 arrives under the current schedule. Next year, the rate of the estate tax is going to be 55%, and the exclusion is going down to $1 million.
So, in fact, the Dick Clark estate avoided tens of millions of dollars of potential estate tax exposure that it would have been subject to had the television icon passed away in 2013.
Given these pending changes to the tax code an estate plan review is necessary this year. If you have not yet scheduled yours, right now would be a good time to take action to arrange for an appointment with a good Oklahoma City estate planning lawyer.