Did Steve Jobs Use These Estate Planning Tools?

9:52 pm Asset Protection, Estate Planning, Probate, Tax Planning

steve jobs e1318542675364 Did Steve Jobs Use These Estate Planning Tools? Deborah Jacobs, who writes about personal finance for baby boomers at Forbes.com, says she is wagering all her Apple stock that the estate of Steve Jobs will not owe the IRS a penny of estate tax.

Since he died worth an estimated $7 billion, some people may find that surprising.  But, as Jacobs notes, for estate planners “it’s all in a day’s work”.  She hypothesizes in a post this week that some of the estate planning tools Jobs may have employed include:

Spousal transfer – Due to the unlimited marital deduction, assets that pass to a spouse (who must be a U.S. citizen) carry no estate tax.   Jobs could have left everything outright to his wife, or put their assets into a marital trust.

Gifts to charity – While Jobs was never known for his charitable nature – he famously shut down the Apple Foundation upon his return to the company – he may have given gifts anonymously in a way that would provide estate planning benefits.

Portability – Jobs could transfer up to $5 million tax-free to his wife. Portability allows her to utilize any of his unused exclusion amount, meaning she could transfer up to $10 million tax free.

Bypass Trust – Jobs may have been advised to put his $5 million generation-skipping transfer tax exemption into a bypass trust, to pass to his grandchildren and subsequent generations free of the GST tax.

GRAT – It is possible that Jobs, knowing he had a reduced life expectancy, set up a series of grantor retained annuity trusts with different terms as a hedge against the mortality risk – if you die during a GRAT term, a portion of the trust is included in your estate.

Help is available to you by contacting your Southern California financial planning experts today.

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