• Paul

    How exactly does this become tax-free? Moving assets to trusts in and of itself does nothing to change their taxability (either gift or estate tax) without a charitable component.

    Moving assets to trusts to avoid probate and protect privacy is light-years away from avoiding federal or state taxes.

    If it was left to his spouse and is covered by the marital deduction then all he did was kick the taxes down the road.

    The only outlet you even suggest he was interested in funding (alternative start-ups) is hardly philanthropic.

  • http://www.WealthQB.com Joe Gordon

    So…are you implying he is using charitable trusts and/or foundations? A transfer in any year would incur gift tax, would it not?

  • http://thetrustadvisor.com Scott

    Hi Joe, thanks for reading and for bringing up this point. Nobody transfers $6 billion in stock — over a lifetime or in a single year, charitable or otherwise — without running into the exemption limits, so it was on my mind too.

    Bernie Vogel suggested that they might’ve structured the transfer as a SCIN. In that case, as long as the trust made at least one token payment on its “purchase” of the shares, it would now own them free and clear. No gift, no gift tax.

  • http://oshins.com Steve Oshins

    Note that Steve Jobs couldn’t have used a SCIN given his significant change in mortality. Unlike a Private Annuity where you can use the regular tables (under IRC Sec. 72) to determine the payments as long as you live at least 18 months, a SCIN has no such protection. If the IRS discovers that he used a SCIN and valued the payments without taking into consideration his true mortality, he would owe a huge gift tax. Also, he would have had a ridiculous debt/equity ratio doing this with a sale to a trust, so he only could have sold it outright which would have given him a ridiculous capital gains tax.

  • Scott Martin

    Steve — thanks as always. I yield to the expert in the room.

    Turns out this is a record-breaking story for us in terms of traffic. It might not perfectly reflect Jobs’ actual estate planning, but all the truly expert feedback is probably coming a lot closer than just about anything out there.

  • Aaron Capan

    This is interesting

  • http://bangsmccullen.com Brian Kirby

    I also cannot fathom how his estate would pass tax free, especially in California where they seem to tax everything. Would there be any way for Jobs to have transferred the stock to some sort of Dynasty Trust and legitimately devalued the stock and paid less gift tax?

  • WorldWideWebFoot

    There is nothing sinister here. All of Steve’s estate was in the form of community property with his wife. When he died, it became hers entirely. When she dies, if there is anything left, then it will be subject to payment of estate tax.

  • http://thetrustadviser.com gia

    i feel so sad that he’s dead

  • http://becomeweddingplanner.net sylmarsh

    I applaud him even in his death after reading this article. Isn’t this the way it should be? Isn’t this what we all want – that what we have worked so hard for throughout our life should be disbursed the way we wish and not taken over by federal, state or otherwise. Good for you, Steve and Laurene!

  • dnd

    I’m really happy he’s dead. The bastard was a jerk to his employees and didn’t donate much money to charity, evaded as much tax as possible with different bank accounts all over the world. Glad he’s dead.