More on Dying in 2010

Previously on this blog, I discussed the potential estate tax benefits of manipulating the date of a wealthy person’s death to achieve estate tax benefits.

The interest in this topic is increasing as reflected in a recent Wall Street Journal article by Tom Herman entitled Stayin’ Alive: How to Cheat The Estate Tax (July 2,2008 at D1) from which the following excerpts are taken:

As ghoulish as it sounds, thousands of high-net-worth Americans who care about the financial well-being of their heirs have a powerful tax incentive to survive until at least Jan. 1, 2009. * * *

Some affluent Americans already are keenly aware of the increased importance of staying healthy. “It’s less important to have a lawyer for sophisticated estate planning than to have a good cardiologist,” says Douglas E. Schoen, a New York political consultant and author who expects to leave a large estate.

The imperative to stay alive is likely to take on growing importance in the final weeks of 2008, especially for wealthy people in poor health. But based on current law, there’s an even bigger incentive to survive until 2010. In that year, the federal estate tax is scheduled to disappear entirely, only to reappear again in 2011 with a $1 million exclusion for 2011.

Don’t bet on total repeal of the estate tax, though, even for one year. Financial planners, accountants and lawyers expect Congress and the next president — whether it be Sen. Barack Obama (D., Ill.) or Sen. John McCain (R., Ariz.) — to reach a compromise that will retain the estate tax in some form.