Billionaire Dies 48 Hours Before Estate Tax is Reinstated

In 1916, Seth Millikin, co-founder of textile manufacturing company Milliken & Co., attempted to avoid the newly created estate tax by giving his children shares of the company. He died in 1920, and the U.S. Supreme Court found that these gifts were subject to the estate tax in 1931.  It was this landmark case that was cited as precedent when Senate Finance Committee Chairman Max Baucus vowed to retroactively reinstate the estate tax for 2010. 

Eighty years later, Seth’s grandson, Roger Milliken, died less than 48 hours before 2011, avoiding estate tax on a billion-dollar estate. Had he died on January 1 rather than December 30, his estate would owe 35% on his fortune over $5 million. Now his heirs get to choose whether they want to pay the estate taxes and receive a stepped-up basis or pay no estate tax and receive Roger’s basis.

Roger, whose fortune peaked at $1 billion in 2003, died at the age of 95 in Spartanburg, South Carolina. He was buried at a private service on January 2nd, and honored at a memorial on January 3rd.

See Ryan J. Donmoyer, Tycoon’s Death Ducks Tax a Century After Family Case, Bloomberg Businessweek, Jan. 6, 2010.

Special thanks to Peter Parlapiano (2011 MBA/M.S. PFP candidate, Texas Tech) for bringing this to my attention.