| In the early part of my legal career, I spent much of my time as an estate planner. I drafted hundreds wills and trusts, often to minimize the estate or gift taxes. On the first day of Trusts and Estates class in law school, my professor said that one fundamental fact of life needs to be recognized, "you can't take it with you when you die." Then we spent the next 14 weeks working on learning how the law provides for ways for people to control their property from the grave, sometimes called the "the dead hand rule."
I don't do a lot estate planning anymore because I have no interest in assisting wealthy families become dynasties. Sure, there is plenty of estate planning to do for working class or middle class families, but it is hard to make a living doing that kind of work. After nearly 20 years of trust and estate practice, I have come to believe that we should adopt as the rule, the basic fundamental fact of life - you don't get to take it with you when you die.
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| Where did we get the notion that people should be able to pass on their accumulated wealth to their children, their friends or their chosen charity? There are many cultures in the world which do not think there is such a right. The notion is a left-over from feudal days. The wealthy, i.e. the kings, barons, dukes, etc, got rich by stealing the land from farmers. To preserve the system, there had to be the right to pass on their property to the eldest son - usually. So inheritance rights developed from there.
In the early 20th century, we recognized that free inheritance rights, without any tax cost, was detrimental to economic and social progress of the country. The accumulation of wealth into fewer and fewer families, results in stagnation.
Now, the wealthy and their Republican followers want to return to completely free wealth transfer. Why would this legal structure be better now in the 21st century than was in the 19th? Obviously, it wouldn't. The wealthy say that eliminating the estate tax preserves jobs. Baloney. To the extent an estate forces small businesses and family farms into directions the owners find inconvenient, that is the fault of assuming that there is a god given right of inheritance, which does not exist, and of poor planning.
I think that one should be able to pass on all of one's wealth to the surviving spouse. "Spouse" should have a broad definition, but limited to one other person who is not just a business partner. I also believe that there must be exceptions to provide family wealth for parents and disabled children, perhaps also disabled siblings, nieces and nephews, but only to the extent of the actual need.
The rest should go back to the government. In other words, I am advocating for a 100% estate tax. If a wealthy business owner-operator or a farmer wants her children to continue to operate the business, make a plan to sell it to them for a fair market value over a reasonable time.
A 100% estate tax is far too radical for most American's to accept; I know that. But policy makers should carefully consider what is the social and economic benefit to the country of having or not having an estate tax. The estate tax has been in place, at at times with top rates of 70%, during the greatest prosperity of any country in history. To call the estate tax a jobs killer is laughable. Rather it forced a greater entrepreneurial spirit in America and provided much of the capital needed to allow that spirit to flourish. Just think of what might be accomplished if the trillions of dollars the wealthiest families still have stuffed in their (figurative) mattresses is brought back into the economy. |
