Monday, September 9, 2013
Kelly A. Moore (University of Toledo College of Law) recently published his article entitled The Curious Case of Dr. Jekyll and the Estate Tax Marital Deduction: Should Prenuptial Agreements Alter the Relationship?, North Illinois University Law Review Vol.33, No. 2, (February 15, 2013). The abstract available on SSRN is below:
This Article joins the chorus of those criticizing the use of the economic unit presumption, using a song sheet involving prenuptial agreements to do so. To make this criticism, this Article considers a discrete question: Should married individuals be able to avail themselves of the 100% estate tax marital deduction when their marriage is governed by a prenuptial agreement? Put another way, should the existence of a prenuptial agreement ever rebut the economic unit presumption? Or, do the elements of simplicity and administrative ease gained through the use of the economic unit presumption still support the presumption even if there is a written agreement undercutting, in some fashion, the existence of an economic unit? The 100% marital deduction provides a benefit to married individuals. Should they be allowed this benefit if they have avoided the burdens associated with marriage, in some manner, by executing a prenuptial agreement? In considering this discrete question, the use of marriage as the only proxy for the economic unit presumption is accepted. Given the lack of a baseline of economic activity between spouses with which to determine if they actually function as economic units, the use of marriage as a proxy for the economic unit presumption adds an element of simplicity to the Transfer Tax Code and eases enforcement concerns associated with determining the transfer tax consequences of intramarriage transfers. For discussion purposes, the use of the economic presumption is accepted, generally, outside of the context of marriages governed by prenuptial agreements.