Once they are retired, many of our clients find a way to spend 183 days a year in Florida, where there is no income tax, no estate or gift tax, and where the “intangibles tax” has finally been totally repealed. If they move to the Sunshine State without taking a lot of “Maine source income” with them, they get out from under the Maine income and estate taxes for good. There are many who think that’s “The Way Life Should Be.” If you decide to make the move, let us know and we’ll help you make sure Augusta knows you’re gone.

If you live here, you know about the Maine income tax because you almost certainly pay it every year. Most people, however, don’t know much about the actual economic impact of the Maine estate tax because by the time it becomes due they are, well, no longer around. Recently representatives of Maine Revenue Services provided some details about the operation of the tax in 2005, which was the last year for which full figures were available.

The Maine estate tax only applies to taxable estates of decedents in excess of $1 million. If total taxable assets (which is a much broader category than assets actually owned by the decedent, since it includes jointly owned property, certain kinds of trusts and other things) exceed $1 million in value, a Maine estate tax return must be filed, even if there is no tax due because everything is left to a surviving spouse or a charity.

In 2005, 2,106 Maine estate tax returns were filed. That does not seem to be a lot for a state with 1.4 million people in it, but it points up the fact that Maine is one of the poorest states in the nation. Only 1,829 (87%) of the returns in 2005 were filed for the estates of residents of Maine; the other 13% were filed for people with assets here (usually vacation real estate) who lived somewhere else. The most common examples were see in our office are people from Florida, New York and South Carolina with waterfront or ski-resort homes in Maine. Of 2,106 returns filed, only 382 showed a tax due. The total tax collected with those 382 returns was (sitting down?) $70,705,701.

The foregoing figures mean that only something like 0.15% of Mainers filed estate tax returns in 2005. The comparable federal figure for the country as a whole in the same year was 0.013%. The Maine estate tax, therefore, has about 10 times the penetration of the federal estate tax, but it still remains of concern to very few people out of the whole population. (Do you suppose that the 0.013% of the national population who filed federal estate tax returns in 2005 were all those family farmers we keep hearing about?)

A bill has been introduced in the Legislature this year that would “conform” the Maine estate tax to the federal estate tax. The most significant effect of the bill, if adopted, would be to increase the exemption under the Maine estate tax from $1 million to $2 million, which is what it is in the federal system. If you take the trouble to read the local paper, however, you know that our fair state is not exactly awash with cash, so the likelihood of the Legislature’s authorizing the revenue reduction that would result from such an increase in the exemption is the same as the likelihood of finding a snowball in the third circle of Hell.

As observed previously in this space, it used to be that out-of-staters who owned houses here could put them in a trust, partnership or limited liability company, which had the effect of converting them from “real estate” to “intangible personal property,” much like a stock certificate, thereby avoiding the Maine estate tax. That loophole has been closed. The best way remaining for a Floridian or New Yorker to keep his or her piece of our rock-bound coast in the family and avoid paying Maine estate tax on it is to give it to the kids before it’s too late. Maine still does not have a gift tax.

We have been following with interest the plight of Brooke Astor, Manhattan socialite and philanthropist. Regular readers will recall that her only son, Anthony Marshall, was removed as her guardian by a court order after being accused by her grandson, Philip Marshall, of neglecting her. Her affairs are now managed by U.S. Trust and Oscar de la Renta’s wife, Annette, who has been a life-long friend.

The interesting recent development is that her will and two codicils to it have been filed under seal in the Surrogate’s Court (like a Maine Probate Court) in Westchester County, New York. Filing a will in court before its maker has died is unusual. It is done to preserve the document. It is also unusual for the will of Mrs. Astor, a long-time denizen of Manhattan, to have been filed in Westchester; it indicates that her guardians now think she has her permanent home at her country estate on the Hudson rather than at her Park Avenue apartment.

This case is also unusual because, although the will and codicils are supposed to be under seal (that is, not available to the public), somebody showed them to The New York Times, which published a full report on their contents on June 24. The will dates to 2002, and left large percentages of Mrs. Astor’s estate (thought to be about $190 million, including a trust left for her by her late husband, Vincent) to the Metropolitan Museum of Art, the Bronx Zoo and the New York Public Library. But what do you know! The two codicils (added in late 2003 and early 2004) cut the amounts going to Mrs. Astor’s favorite charities in half and leave a big chunk of the estate instead to the Anthony Marshall Fund, a private foundation that Mrs. Astor’s son uses to make his charitable gifts. The amount passing to Mr. Marshall personally was also increased by the two codicils. A handwriting expert has opined that the 2004 codicil was forged, although it was ostensibly executed in the presence of an attorney, whose license to practice law is therefore on the line.

There is no one more diligent in the pursuit of funds left to it that a well financed charity, such as the Met, or the Zoo or the Library. Whether the codicils will be given effect or ignored will not be determined until after Mrs. Astor’s death, and the determination looks like it will involve a battle royal between Anthony Marshall and the charities. Stay tuned.

Incidentally, Mrs. Astor’s will leaves exactly $1 million to each of her two grandsons: the precise amount she can pass to them without incurring a generation-skipping transfer tax. Somebody got that part right, at least.

As we go to press, members of the Bancroft family, which has owned Dow Jones and Company and published The Wall Street Journal for more than 100 years, are pondering whether to sell the crown jewel to Rupert Murdoch’s News Corporation for $5 billion. It’s a tough problem to have.

A little noticed player in the drama is the Boston law firm of Hemenway & Barnes, whose managing partner, Michael Elefante, is in charge of a number of trusts benefiting members of the Bancroft family. The trusts collectively control 64% of Dow Jones’ voting stock, and have done so since the mid-1940s. Says London’s Financial Times (5/16/07), “If, for more than a century, the Bancrofts have served as the guardians of . . . [The] Wall Street Journal newspaper, then Hemenway & Barnes has served the same role for the Bancrofts.”

The law firm is old, tony and unaccustomed to a lot of public attention. It is rumored to derive much more of its income from trustees’ commissions than from the practice of law. Right now, however, it is on the hot seat. The decision to sell or not to sell must actually be made by the trustees, not the Bancroft family members who are trust beneficiaries. In the wake of the News Corp. offer, the value of the stock has risen substantially on the theory that the sale, at a 65% premium over what the stock was selling for before the offer became public, will end up occurring. If it does not occur because Mr. Elefante and the other trustees decline Mr. Murdoch’s offer, they could all be sued for breaching their fiduciary duty, not only by Bancroft beneficiaries who favor the sale, but also by other shareholders in Dow Jones (such as hedge funds), who will argue that the trustees breached their fiduciary duty to minority shareholders by failing to maximize the value of Dow Jones’ assets. Viewing the situation from the relative safety of Portland, Maine, we are confirmed in our conclusion that serving as trustee is generally a pretty bad idea.

We don’t read a lot of books about sports, so we hope you’ll take seriously our recommendation of Jonathan Eig’s Luckiest Man: The Life and Death of Lou Gehrig (New York: Simon & Schuster, 2005; 368 pp.; cloth; $26). Eig is a reporter for The Wall Street Journal and a very good writer. The book is so well edited that we did not find a single typo, which is a marvel in this day and age.

Everybody knows that Lou Gehrig, the great Yankee slugger and first baseman, died of amyotrophic lateral sclerosis, which has ever since been known in this country as “Lou Gehrig’s Disease.” That’s just the beginning of the story. Dominated and then ignored by his imperious mother, misinformed about his medical prospects and the course of his treatment by doctors at the famed Mayo Clinic and mourned by all who knew him, Gehrig was a simple man. The book makes clear the extent to which he and teammate Babe Ruth permanently changed the way baseball is played. When they began, home runs were hit inside the park and the same ball was used for an entire game; it often ended up looking more like a water balloon than a baseball. This is a compelling story not only about a disease but also about an interesting man and the national pastime.

Go Sox.