The Optimum Marital Deduction Survives the Tax Reform Act

Several years ago an article appeared in the pages of this journal which suggested that those attorneys who regularly focused on obtaining the maximum marital deduction in the wills they were drafting for their clients might be suffering from a form of estate planner\u27s myopia. That is, they were losing sight of their ultimate goal of minimizing the total estate tax burden imposed on the husband\u27s assets as they pass from him, through the wife, on to the ultimate beneficiaries. The danger foreseen was that, as an attorney employed one of the various formula clauses designed to obtain every possible dollar of marital deduction at the husband\u27s death, the attorney might also unwittingly and unnecessarily increase the estate tax burden at the wife\u27s later death. A study based on a computer simulation of 28,000 cases was referred to which indicated that ( 1) drafting for the maximum marital deduction would have been appropriate in only 10% of the cases whereas ( 2) the marital deduction should not have been used at all in 55 % of the cases and ( 3) the entire estate should have been transferred to the wife in 21 % of the cases. Accordingly, it was concluded that •instead of striving for the maximum marital deduction, the attorney should be searching for the optimal transfer from husband to wife-the amount that will set the stage, so to speak, for the lowest overall estate tax bill for husband and wife together, even though this amount may not take full advantage of the marital deduction