Steve Jobs California Estate Planning UPDATE

I just saw this on PRweb. Interesting read I thought:

Estate Street Partners affirms that through Steve’s brilliant foresight, he may very well have saved his family $3B and public scrutiny with well-constructed irrevocable trusts

Boston, MA (PRWEB) October 27, 2011

Steve Jobs may not have been able to cheat death, but it appears that he has been able to legally avoid estate taxes. After Estate Street Partners examined his public financial documents and property assets he owned, it appears he used an asset protection tool such as an irrevocable trust to avoid probate and paying estate taxes. Estate taxes would have cost up to 35% of his estate. Reportedly he amassed about $8 billion after the sale of his Pixar shares to Disney and he had approximately $2 billion worth of Apple shares before his death so with good estate planning he thwarted the IRS of an estimated $3B.

No one knows for certain what precise estate planning tools Mr. Jobs used though except his family. He was a private person and appears to have owned many of his assets with some type of trust whether revocable or irrevocable. Any trust (revocable or irrevocable) would avoid probate, but if Mr. Jobs used revocable trusts, he would still pay estate taxes.

We can conclude by Mr. Jobs’s meticulous nature to detail though he would have used an irrevocable trust.

Without any trust, at Mr. Job’s net worth, his probate expenses would have been about 4-7% and his estate taxes would be 35% of the value of his estate above $5M, respectively; in other words, a whopping $450M for probate and $3.1B for estate taxes. Probate is the process through which a court determines the value of the estate and approves the distribution of assets covered by a will if there is one.

“You don’t have to be a billionaire to take advantage of the same strategies that Steve Jobs brilliantly executed. Almost anyone that has worked hard to build a nest egg needs to do similar estate planning for asset protection as well as Medicaid planning, and to avoid estate taxes and probate. John Maynard Keynes said it correctly, ‘The avoidance of taxes is the only intellectual pursuit that carries any reward’,” states Rocco Beatrice, Managing Director of Estate Street Partners in Boston, Massachusetts.

Probate and estate taxes are the only voluntary reporting systems in the entire IRS code and civil procedures. Both the probate process and the voluntary taxes applicable in death taxes are affected only to assets titled to the deceased individual’s name on the date of death. More simply, the probate and estate taxes would have applied to Mr. Jobs’s property and assets that were legally in his name at the time he passed away.

“These [probate and estate taxes] can be totally avoided by simply using an irrevocable trust. I hope, for the sake of his children and wife, that Jobs implemented an irrevocable trust as opposed to a revocable one. It [revocable trust] shouldn’t even be in the dictionary – in my opinion.Revocable trusts clearly have no protection against anything other than the probating process. That’s why we created the irrevocable Ultra Trust® for our clients,” explains Mr. Beatrice.

Whether Jobs used a revocable or irrevocable trust only his executors and close family members would know for sure, but after previewing his public records he purchased some properties under JOBS TRUST and JOBS STEVEN P TRUST so it is safe to conclude that he had some asset protection strategy in place.

At one point, he owned an airport Stockton Municipal Airport appraised at $35M and owned another parcel of land worth $52M. With assets in trust the terms of the trust are not disclosed to the public.

“A record search of assets titled to Steve Jobs’s personal name is chump change to what we will ever hope to find out about the extent of which irrevocable trust like our Ultra Trust® was used by Steve Jobs. In future years to come, we may get glimpses of the extent of his estate planning, but maybe only if there is a lawsuit from disgruntled family members or creditors who may claim that they should have part of the wealth.”



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