December 31, 2009--Don't Pull the Plug On Dad

One thing to look forward to tomorrow, if you are the beneficiary of someone who has an estate worth tens of millions of dollars, or even billions, and he or she dies before the end of 2010, you will not have to pay any estate taxes. Zero. None. Nada. There is this loophole in the inheritance tax law that says that If Congress doesn't act before then and if your loved one passes after that date, you will have to pay up to 55 % in taxes if the estate totals more than about $1.0 million.

So we are discovering that some families of the super rich are right now keeping dad or mom on life support, not authorizing pulling the plug on them, until after midnight tonight. As the ball falls on Times Square signaling the beginning of a new year and a new decade, all over America, at that stroke of midnight, I suspect DNR orders will be quickly carried out.

This is not just the product of my overactive imagination. Read about it yourself in the linked article from the Wall Street Journal. Who better than them knows more about the behavior of the very wealthy?

According to the WSJ, it is not just venial children and spouses who are acting this cynically:

To make it easier on their heirs, some clients are putting provisions into their health-care proxies allowing whoever makes end-of-life medical decisions to consider changes in estate-tax law. "We have done this at least a dozen times, and have gotten more calls recently," says Andrew Katzenstein, a lawyer with Proskauer Rose LLP in Los Angeles.

But then there is another, under-reported-upon aspect to this.

Beginning tomorrow we can expect to see an uptick in the number of deaths among the rich who are terminally-ill. But with the likelihood that the Democrats will want to amend the loophole in the estate tax law well before the end of next year--seeking both fairness in the tax code and additional revenue to reduce the budget deficit--if I were a wills and estates attorney who serves wealthy clients, I would strongly advise them to take extra care of their own well being between tomorrow and then since there might be an extra incentive on the part of some of their heirs to see that they depart this life well before their alloted time and any such Congressional action.

Just one of my new year's wishes for you--keep a very close eye on Junior.