- Estate Tax
Last week we addressed the possible repeal of the federal estate tax. Briefly, the federal tax law imposes a tax on our assets when we die. The tax exempts the first $10 million in assets. Thereafter everything is taxed at 40%.
This law was not designed to raise much money (which it doesn’t) but to prevent wealthy families from passing their wealth on to future generations of often times undeserving children and grandchildren through the use of dynasty trusts. It has resulted in complex and expensive estate planning schemes that often lack any substance and may result in lengthy litigation.
Repeal is a moral decision and not a financial one. It is our right to spend our estates as we choose versus our society not wanting to allow successful people to concentrate their wealth and power in multiple generations of often undeserving heirs. That is the choice each one of us needs to address on our own.