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The estate tax is a tax on the estate of a deceased person. 2010 represented a year in which, upon dying, no tax was levied against the estate. But with a new year brings new standards and a dramatic departure from 2010. It's been a roller-coaster ride, but some estates may end up getting a huge tax hike -- depending on what Congress does in its final days. One approach to combat the rise .... estate tax suicide.
In this world, nothing is certain but death and taxes. The famous words of Benjamin Franklin are being tested by potential estate tax suicides that find people literally dying to avoid taxes. The cases may not seem as extreme as might first meet the eye. Rather, concerns over an estate tax suicide are thought to be limited to those cases in which an individual is already close to death. Morbid? Yes. Financially prudent? Could be, yes. What type of an affect that such a permanent action would have on say a life insurance policy depends on individual cases.
"The concern is suicide. It is not fanciful to imaging that several hundred, or even a few thousand people suffering from terminal conditions will give serious consideration to ending their lives in ways that will benefit their heirs financially," the ABA Journal quotes Duke law professor Richard Schmalbeck on the estate tax suicide. Whether there will also be estate tax inspired murder is a completely different inquiry.
The bottom line is that there is a lot of money to be saved, especially for larger estate, when an individual dies before the ball drops to ring in 2011. One solution posed by Shmalbeck was to enact the new tax on the date the bill gets introduced. Another helpful option would be to meet with an estate planning attorney to ensure that a will is up to date and taking advantage of any and all tax breaks. Rather than accelerating death, individuals should follow the changes in the law and get professional guidance on this ever-evolving issue of estate tax liability.