Starting Jan. 1, the estate tax -- which can erase nearly half of a wealthy person's estate -- goes away for a year. For families facing end-of-life decisions in the immediate future, the change is making one of life's most trying episodes only more complex.The greater challenge will toward the end of 2010 if Congress has still failed to act:
"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?"
Under current laws in effect until the end of this year, the size of the exemption is $3.5 million per individual or up to $7 million per couple. The tax is slated to disappear entirely on Jan 1. ...Thus, next December, heirs will face a strong incentive to pull the cord on ederly relatives.
The estate tax is scheduled to return in 2011 at a 55% rate with an exemption of slightly more than $1 million.
The right policy is to make repeal permanent. The estate tax punishes saving relative to spending and serves mainly to prop up the incomes of estate tax lawyers and accountants.