We don’t know what’s going to happen in the future. It’s very much an art form, but right now you have that opportunity to pitch it out to the running back and get it out. Now, before you take a chance what we are forced to do in the future and also in the future might be good. Potentially. When was it?
George Steinbrenner died? It was the a hundred million dollar in the mid twenties. He died three and a half, $350 million a state that 2010 was the throw momma from the train year. Cause if they died that year, there was no estate tax Steinbrenner was mentioned in the news, but the biggest one was this guy down in Texas.
He was an oil guy. And I think at the time he was the 14th wealthiest man in the world. Again, this is 2010 and I believe it was a $19 billion estate that he had his family. 10 billion, $8 billion. That’s with a B in taxes, just because he died that year. Now, one of the other things though that happened in 2010 is that stepped up basis went away.
Right? When you receive an asset at death, you get it with a clean tax base. So you could say sell it the next day and not have any capital gains tax to pay. But in 2010, when they said you can pass everything to state tax free, if you took that option, it had carry over basis. You had to take in essence what your parents, his basis was in it.
But look, if I can save a 50% a state tax and pay 25% capital gains tax or whatever it was back then, you’re certainly going to take the second option. There’s give and take. But why that’s important now is this is all cyclical and we’re seeing this stuff come back right. They’re wanting to get rid of stepped up basis at death there.
They’re talking about this right at death, whatever your basis in your assets are, as you pass them to your kids, they pass to the kids. And so they’re going to pay capital gains tax and some point on all of those assets. Now, I think that’s going to be a tougher tax, lot of pounds. Because everybody has to deal with that.
He average inheritance is 177,000 and most of it consents of primary real estate, primary residences. And there’s no child that’s going to want to inherit mom and dad’s house without the ability to sell it the next day, tax-free the estate tax it again, it doesn’t affect most people, even if it goes back to three and a half million, most people don’t have $7 million net worth, but you have to also.
Like I said earlier, all of the assets I glossed over this, but I want to touch on it pretty quickly. Life insurance prior to going into law school in 99, I was a life insurance agent, right. And the three most hated professions in the world are attorneys, life insurance agents, and used car salesman. My best.
Friend’s a used car salesman. So I hit all three in some way. One of the selling points of life insurance is that it’s not. Tax. And I have a $5 million life insurance policy on my life and my wife’s the beneficiary and I die. She gets $5 million, completely income tax rate. The only reason for that really is because the insurance companies have this really strong lobby in Congress, and they’ve been able to carve out the definition of income to include.
Life insurance death benefit. That’s it. So the reason, the issue though, is that my wife would now have $5 million of cash as part of her estate. And now is there an estate tax problem, how to plan for that life insurance death benefit becomes a big one. Anyway, I don’t want to, that’s a much more kind of stuff.
Tax issue. And it’s definitely something that can be dealt with, but there is a small window of opportunity that can be going away that portion out. Right. I think it’s important for folks to be aware of this stuff and understand it because things are going to change. And in the very end, you may just be stuck.
It just may be how the times are, but there may be opportunities to. Do that wild cat off as the ball to the right, when we’re all stuck. Right. It’s the way the times are. And we’re just going to have to live through it now, again, I’m not coming from any kind of political side on this. I just, as a tax attorney, I hate.
Paying tax and pay my fair share and all of those kinds of things. But, and by the way, if you ever worked with a tax attorney that likes taxes, you’re working with the wrong attorney, but the point is that there really are planning techniques that can put you in control and you in power of what happens with your legacy at your day. .