Abstract Married couples can save up to 1, 052, 000 in estate taxes through optimal combination of the transfer tax rate schedule, the unified credit, and the marital deduction. In the special case in which both deaths occur relatively close together (zero to ten years apart), larger tax savings can be achieved by also taking advantage of the credit for prior transfers. For example, over two million dollars in savings can be achieved on a total estate of 20 million, if both spouses die within two years of each other. Arranging one's financial affairs to achieve these savings makes sense in some situations and is not worthwhile in others. In this paper the methods for achieving these savings and the optimal level of savings in various situations are illustrated. Flexible methods for achieving the optimal levels of savings depending on the actual pattern of the couple's deaths are also discussed.
Richard P. Weber (Mon,) studied this question.