As nearly the entire world knows by now, Steve Jobs, the founder of Apple died on Wednesday evening. He and Steve Wozniak were the founders of Apple. Essentially, rising from the ashes as an adopted child, Steve Jobs was responsible for establishing one of, if not the most, iconic brands ever. After hearing of Steve Job’s death, my mind shifts to estate planning.
His worth is estimated to be $7 billion. Quite likely, a vast majority of his wealth is a heavy concentration of Apple common stock. This morning I contemplated the following:
1. His estate will receive a step-up in basis under section 1014 of the Internal Revenue Code based upon the Hi/Low average of the trading price for Apple common stock on October 5, 2011. This is a tremendous benefit because Apple stock is very near an all-time high. The stock closed at $378.25. His new basis per share is $378.68. I also thought about the fact that he died in the evening. Perhaps, if he had died while the market was still open, the stock may have dropped in price causing his estate to obtain a lesser step-up in cost basis.
2. I then considered Steve Job’s family. He left a wife and four children. What type of estate plan did he create, if any? If he did extensive planning, who was his attorney. How does a multi-billionaire go about choosing an estate planning attorney? What types of trusts did he create? Does he have a family foundation? Will monies be contributed to the family foundation upon Steve Job’s death, or did he simply leave all assets to his wife in various trusts? If he did leave assets to his wife, is a motivation his partial reliance upon Congress ultimately eliminating the estate tax, which would result in his children inheriting his wealth transfer tax free?
3. Then I thought about the preparation of his estate tax return. Some professional tax attorney or CPA has the utmost privilege of preparing his estate tax return. Who is it? How is this person selected? Also, has he been aggressively gifting through use of GRATs and other freeze techniques since learning of his cancer diagnosis?
The above are just a few of my thoughts. Like any other family facing the death of a loved one, the family of Steve Jobs must now cope with a variety of financial, legal and tax matters. Hopefully, Steve Jobs was amply prepared.
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