The Estate Tax Conundrum

The Boston Globe recently reported that tax cuts remnant from the Bush administration imposed no estate taxes in 2010.  Taxes will return to a top rate of 55% if Congress doesn’t make new provisions before the new year.  One possible outcome would be to levy no tax on the first $3.5 million of an individual’s estate, or the first $7 million of a married couple’s estate.  Estates would be taxed up to 45% for estates with greater value.

The article implied with tongue in cheek, that in the meantime, some wealthy elderly might decline life-saving treatments so they may “expire before the tax-free window does.” If such cases did occur, the estate-holder’s family, trustee or estate planning attorney will be responsible for an estate legacy potentially vastly different than the one they expected.