Buffett Avoids Estate Taxes

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Look. We know we’re all supposed to suspend our standard-issue cynicism when the very old and very rich announce that they are giving a vast fortune to charity. But we cannot bring ourselves to do it. The announcement today that Warren Buffett would be giving the bulk of his $44 billion in Berkshire stock to the Bill & Melinda Gates Foundation dovetailed in a not-so-pretty-way with the news last week that the House had voted to ressurect the estate tax in 2011, after it takes a one-year hiatus in 2010 under current law.
Buffett was one of the leaders of those opposed to repealing the estate tax. By donating his fortune to his friend’s charity, however, Buffett may have found a clever way to avoid the estate tax for a large part of his own fortune. We're not experts in estate planning, but we're told by those who should be that this donation will likely put a large part of Buffett's fortune out of the reach of the government.
So if you are merely a millionaire who wants your heirs to benefit from your capital accumulation, you’ll get hit with a hefty tax (unless you manage to die in 2010). But if you are a billionaire with billionaire buddies who run multi-billion dollar charities, you won’t lose control of your fortune to the government. Proving, once again, that the very rich are different from the merely rich.

Buffett Makes $30.7 Billion Commitment to Gates Foundation
[Bloomberg]

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