2013: Bad Year to Die If You're Rich
Financially speaking, 2010 was a pretty good year to enter the next life if you were wealthy.
There was no estate tax, so heirs inherited their dad or mom’s fortune without paying the usual 35 percent or more in estate taxes. (That lead some to call it the “throw mamma from the train” year).
Next year, however, could be different.
According to an analysis by Tim McCausland of Orange County Trust Co., “2013 is shaping up to be a very bad year to die” for the wealthy and even affluent.
The reason is largely the estate tax. Currently, estates valued at $5.12 million are exempt (or $10.24 million for couples.) Next year, unless Congress acts, the exemption will drop to $1 million for individuals and couples.
What’s more, the estate-tax rate jumps to 55 percent from 35 percent.
“At these levels, many more families will be affected by the federal estate tax. Compromise legislation is floating about, but movement is always ponderous in election years,” McCausland writes.
There is another reason 2013 is a bad year to die: a new surtax from Obamacare goes into effect, levying 3.8 percent on certain trusts and estates income.
All of this creates an added incentive for the wealthy stay healthy in 2013. Their heirs also have an interest in seeing their wealthy parents hang on through the next year or two.
If 2010 was the year of “Throw Momma from the train," in 2013 it may be “Keep Mom and Dad alive.”
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank