Does the Estate Tax Affect When People Die?
Posted at noon on Dec. 28, 2012
John Carney looks at the incentives created by the recent fluctuations and upcoming changes in the estate tax.
“In 2010, after a year in which the estate tax was zeroed out altogether, Congress passed a law that set the estate tax at 35 percent and exempted all estates under $5 million, adjusted for inflation. That law expires in January 2013 when the exemption will fall to $1 million and the tax will rise to 55 percent.”
“If the life of an elderly wealthy family member extends into 2013, the tax bills will be substantially higher… It’s well-known that people can delay death, for example, in order to live through significant dates… based on past reactions to changes in taxes, it at least seems likely that some deaths that might otherwise have occurred shortly after January 1 will occur shortly before.”