What’s less remarked upon is that estate taxes are always double taxation. Estates are built with savings that have already been taxed as income, or soon will be. Even contributions to tax-deferred retirement accounts will be subject to the heirs’ income taxes over time.The superrich can afford to give away assets during their lives or hire estate planners to help minimize the tax. Their estates often wind up being taxed at a lower effective rate than those of merely affluent individuals. The main victims of the death tax are middle-income savers and small-business owners who die before transferring ownership to their children.
A Wall Street Journal op-ed piece about the impact on GDP of proposed estate tax changes observes that the tax is a form of double taxation. Wealthy Americans can often avoid the impact of death taxes through sophisticated estate planning techniques, but those with middle-class incomes and business owners often suffer. It is important to ensure that you have an estate plan in place for your family and for your business, particularly if you fall into one of those hard-hit groups. Contact us today to see how our attorneys can assist you with that.