Commentary Magazine


Topic: Joshua Rubenstein

You Think Death Taxes Are Tricky Now

As this report notes, the estate tax will disappear for a year beginning tomorrow, and unless Congress acts, it will pop back up in 2011 at a pre-Bush tax-cut rate of 55% with an exemption of approximately $1 million. This caused some this year to look at end-of-life decisions in a different light:

“I have two clients on life support, and the families are struggling with whether to continue heroic measures for a few more days,” says Joshua Rubenstein, a lawyer with Katten Muchin Rosenman LLP in New York. “Do they want to live for the rest of their lives having made serious medical decisions based on estate-tax law?” . . .”I’ve been practicing for more than 30 years, and never has the timing of death made such a financial difference,” says Dennis Belcher, president of the American College of Trust and Estate Counsel. “People have a hard enough time talking about death and addressing estate planning without this.”

But that is nothing compared to what will occur at the end of 2010. This year families have been mulling whether to keep patients alive. But not so in 2010. Then families will have (excuse me but it’s true) an incentive to end the lives of their ailing rich relatives before Uncle Sam swoops in at the start of 2011 to take 55 percent off the top. There are many good reasons why Congress shouldn’t allow any taxes to go up while the economy is on shaky ground, including estate taxes, which may adversely impact closely-held businesses. But Congress might want to think especially hard about a few of the peculiar incentives it is creating by allowing the Bush tax cuts to “lapse.”

As this report notes, the estate tax will disappear for a year beginning tomorrow, and unless Congress acts, it will pop back up in 2011 at a pre-Bush tax-cut rate of 55% with an exemption of approximately $1 million. This caused some this year to look at end-of-life decisions in a different light:

“I have two clients on life support, and the families are struggling with whether to continue heroic measures for a few more days,” says Joshua Rubenstein, a lawyer with Katten Muchin Rosenman LLP in New York. “Do they want to live for the rest of their lives having made serious medical decisions based on estate-tax law?” . . .”I’ve been practicing for more than 30 years, and never has the timing of death made such a financial difference,” says Dennis Belcher, president of the American College of Trust and Estate Counsel. “People have a hard enough time talking about death and addressing estate planning without this.”

But that is nothing compared to what will occur at the end of 2010. This year families have been mulling whether to keep patients alive. But not so in 2010. Then families will have (excuse me but it’s true) an incentive to end the lives of their ailing rich relatives before Uncle Sam swoops in at the start of 2011 to take 55 percent off the top. There are many good reasons why Congress shouldn’t allow any taxes to go up while the economy is on shaky ground, including estate taxes, which may adversely impact closely-held businesses. But Congress might want to think especially hard about a few of the peculiar incentives it is creating by allowing the Bush tax cuts to “lapse.”

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