Chapter 20: Death and Taxes
Trying to Make Sense Out of Rules That Keep Changing

Ever since Caesar Augustus imposed an estate levy to pay for imperial Roman exploits, death and taxes have walked hand in bony hand. No one really likes paying taxes, but let’s not forget that they pay for most of the things we value in modern society: defending the nation, providing health care, jobs, and housing, paving the roads and so on.

It is also a way of redistributing wealth. Franklin Roosevelt used the estate and gift tax system to do so during the Depression. It enabled the transfer of money from those with wealth to those who were unfortunate during those hard times.

This chapter discusses some of the issues everyone, no matter how wealthy, ought to know about death and taxes.

Tax planning is the core of much estate law. It is most important to people with substantial assets, or with assets that will become substantial over time. “Substantial” currently means about $800,000 or $900,000. Many people are surprised when they discover that they are in fact “rich” in the eyes of the tax law though they are not “rich” in everyday life.

Even if you aren’t rich and don’t expect to become so, this chapter provides a very brief discussion of the basic tax-reduction methods for estates. Then, if your estate grows or the law changes, you’ll know what to discuss with your lawyer.

Passing an estate at death may also have income tax consequences, and this chapter discusses these briefly.