In 2010, after a year in which the estate tax was zeroed out altogether, Congress passed a law that set the estate tax at 35 percent and exempted all estates under $5 million, adjusted for inflation. That law expires in January 2013 when the exemption will fall to $1 million and the tax will rise to 55 percent.
Many families are faced with a stark proposition. If the life of an elderly wealthy family member extends into 2013, the tax bills will be substantially higher. An estate that could bequest $3 million this year will leave just $1.9 million after taxes next year. Shifting a death from January to December could produce $1.1 million in tax savings.So, we know especially from the work of David Phillips at UCSD that people are capable of delaying their death day, at least a little bit. But can we speed things up without a bit of outside help? Will we have a spate of late night suicides on the 31st? Would we do that for sake of tax savings for our heirs? It will take a few months to know for sure whether there was, in fact, a statistically significant jump in deaths over the last few days of December 2012, so we will have to revisit this question later.
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