See Virginia, the Grass is NOT Greener in South Korea

Grass is greener, notAs much as many Americans complain about estate taxes, it appears that South Koreans might have even bigger cause for complaint. The Chairman of Samsung's family might lose half of his assets to the government.

Samsung chairman Lee Kun Hee suffered a major heart attack three months ago and has been in the hospital ever since. It does not appear he will live for much longer. That is causing some big estate problems for his heirs. Hee's estate is believed to be worth approximately $12 billion. As China Topixpoints out, in an article titled Samsung Heirs Could Pay a Massive US $6 Billion Inheritance Tax, under South Korean law the estate will have to give half of the estate to the government. The family could avoid some of this tax burden by placing the money in a foundation, but that would mean giving up some control of the assets.

It is unclear whether Hee could have avoided this through estate planning before his heart attack. It is possible that South Korea has laws and vehicles that could be used to more effectively keep wealth in the family as opposed to giving it to the government. In the United States, if a wealthy person does nothing, then their family might not be much better off than Hee's. The government will not necessarily take half of the wealth, but a significant portion of the estate will be lost, as much as 40% in some cases.

Of course, in the United States there are ways to avoid the estate tax or at least to minimize the burden it can cause families. However, it requires being proactive. You cannot expect to wait until you are sick in the hospital if you hope to avoid the fate of Hee's heirs for your heirs.

You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.

Reference: China Topix (July 23, 2014) Samsung Heirs Could Pay a Massive US $6 Billion Inheritance Tax



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