“The Boomer” is a column written for adults nearing retirement age and those already in their “golden years.” It will also promote reader interaction by posting e-mail responses and answering reader questions. E-mail your questions or topic ideas to thefoxboomer@gmail.com.

George Steinbrenner III purchased the New York Yankees franchise in 1973, after the club struggled in the late 60s and early 70s from mismanagement.

All baby boomers living in the NYC tri-state area, as well as Yankee fans all across America, knew what the Yankees return to being a winner would mean to them, especially in the Bronx, which was in total decay. 

The Yankees entered the 70s seeking to replicate their success from the 50s and early 60s. This team was 11 years removed from its last championship season when "the Boss" headed a group that bought the team from CBS Inc on  Jan. 3, 1973, for about $10 million. Everyone hoped Steinbrenner could put the Yankees back on top. 

And that's exactly what he did.

In 38 seasons as owner, Steinbrenner led the Yankees to seven World Series championships, 11 American League pennants and 16 American League East titles. 

Earlier this week, Steinbrenner, passed away at a hospital in Tampa, Fla., at the age of 80 and apparently, he had an impeccable sense of timing. According to Forbes magazine, Steinbrenner was worth $1.1 billion.

The total federal estate tax his family would have owed if he died last year or next year?  Approximately $500 million. 

Total federal estate tax his family owes this year?  Zero. 

By dying this year, the billionaire owner found the sweet spot in the U.S. tax code. Dying during a year in which Congressional dilly-dallying has allowed the estate tax to lapse, potentially saving his heirs hundreds of millions of dollars. By George, that's a good thing!  

Most baby boomers may be far from being billionaires, but word has it that having a million dollars taxed at 55% might not be that far off.  Knowledge of estate planning and wills are very important in our retirement years. 

Boomer sat down with Luke Vandermillen, vice president of retirement and investor services at the Principal Financial Group, about how estate planning has changed this year.

Principal Financial Group recently completed its quarterly Financial Well Being index. The survey is now in its tenth year and findings reveal how workers and retirees have improved their financial behaviors as a result of the recession and how they plan to maintain these behaviors even after the economy improves.

Boomer:  What trends did this year's survey find about retirees/baby boomers attitudes to changing/updating wills as compared with the past 10 years?

Vandermillen:  The Principal Financial Well-Being Index is a quarterly survey designed to ask a number of employee-benefit trend questions but also to ask new, topical questions. Our questions related to wills were asked for the first time this quarter so we don't have any trend data on this topic in particular. 
 
Boomer:  Are people becoming more involved with updating wills, estate planning, or less?

Vandermillen:  In our work with individuals and business owners, it seems they are actually becoming less involved in starting or updating wills. Given the current economy, this might be one more expense that individuals are choosing to avoid. Instead they are using other tools such as the benefit designation on their 401(k) plan to pass on assets. 

Boomer:  Does Principal Financial Group recommend a certain strategy (i.e., number of times per year) for updating wills?

Vandermillen:  The first thing individuals should do is work with their financial advisor to make sure their will and beneficiary designations are accurate and up to date. This is a good topic to revisit on an annual basis or when certain events occur, such as the birth of a child, marriage, divorce, etc. It also makes sense to consider outside influences like inheriting money or a change in tax law. And if an individual owns a business, it’s even more important to keep the will current. Poor planning in this case might not only hurt the owner's family; it might hurt employees and customers. 
 
Boomer:  Any other specific comments on this topic?

Vandermillen: Wills are an important planning tool as part of any financial strategy. Estate taxes represent a major shift that affects more consumers than people realize. Right now there is no  federal estate tax. Next year, unless Congress acts, any wealth above $1 million will be subjected to an estate tax that can exceed 55%. At $1 million, this will affect business owners, farmers and even the mass affluent. 

 

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