Steve Jobs, a great American innovator and the visionary who built Apple into a global technology leader from a California garage, died yesterday at the age of 56. Jobs had a history of well-documented health problems starting with an incident of pancreatic cancer in 2004. His health had been a controversial topic for years and a deep concern to Apple fans and investors.
Jobs is believed to have left an estate valued at approximately 7 billion dollars. While details of how the estate will be handled have yet to surface, it is a good bet that extensive estate planning was a major factor in Jobs life over the past decade. Generally, the prognosis for pancreatic cancer is not good and Jobs had also undergone a liver transplant in 2009. Thus, it is safe to say that Jobs was aware of his own mortality and likely was being advised as to the importance of planning to preserve his legacy. “Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life,” Jobs once said during a Stanford commencement ceremony in 2005.
The estate tax for 2011 is a fairly low 35% with an exemption for the first 5 million dollars in the estate. Had Jobs passed last year his executor could have opted out of the estate tax altogether. Nevertheless, it is doubtful that Jobs’ estate will pay the full 35% on every dollar over 5 million. During his lifetime, Jobs was sometimes criticized for his lack of charitable giving, however it is important to note that charitable giving can be made during life or at death and can help to greatly reduce or eliminate the estate tax burden. It would not be surprising to learn that Jobs formed a testamentary foundation or charity to help carry on his legacy, provide for his family, and reduce his estate taxes.
Of course, estate planning is about more than just taxes and the need for estate planning affects more than just the wealthy. For a long time, Jobs was suffering through health problems, just like so many other “ordinary” individuals. Thus, it is important to understand that estate planning is necessary, not just to avoid taxes that may never apply to the vast majority of us, but to prepare for an uncertain future and to provide security and peace of mind for ourselves and our family.
Steve Jobs, a one-of-a-kind individual who made the lives of everyone his ideas touched a little better, has passed on. Through his estate plan, he may continue to support his loved ones, and the citizens of the world, for years to come.