MUDDLING ALONG WITH THE FEDERAL WEALTH TRANSFER TAX: A SURVEY OF PRACTITIONERS AND LAW SCHOOL PROFESSORS

A survey of members of the American Bar Association Real Property, Probate and Law Section dealing with the impact of the Taxpayer Relief Act of 1997 changes, such as the increase in the unified credit, suggests that the changes will have little impact on estate planning revenues and the need for tax driven estate planning. This indicates that reduced transaction costs probably will not materialize. They also predicted that a repeal of wealth transfer taxes could cut an attorney's estate planning revenues by almost half. Based on the responses to modification questions, the practicing bar apparently does not embrace many of the longstanding scholarly proposals, particularly those based on income tax solutions. Among practitioners, the proposal that received the most support was retaining wealth transfer taxes with increases in the unified credit. That modification preserves the estate planner's livelihood while also relieving some of the political steam for repeal. Among professors, no consensus exists as to the direction or form of reform, although eliminating the wealth transfer tax system along with Section 1014 gained the most approval. Among both groups, a perceived importance of family businesses exceeded the overall impact of those assets on wealth transfer tax revenues.