Estate tax reform is an easy issue to overlook, especially if your estate does not reach the threshold to enforce the tax. On the other hand, some wealthy individuals are buying survivorship or second-to-die insurance to help their spouse pay for the estate tax bill. If the estate tax were to be abolished, the insurance could theoretically become unnecessary, but there is still questions about changes to the current marital exemption and unlimited marital deduction for these policies. So, before cancelling your second-to-die policy, you must consider the possibility of a disappearing and then reappearing estate tax depending on who enters office, especially considering how it can be far more expensive to insure yourself four or even eight years down the road.
See Evan Simonoff, Eliminating Estate Tax Could Torpedo Survivorship Insurance Market, Financial Advisor, February 28, 2017.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
