I am as guilty as the next lawyer of failing to consider critically the laws I am paid to know and apply.  Critical legal studies asks whether a law, or entire legal system, is worthwhile.  Trust and Wealth Management Marketing has a post alerting us to a thought-provoking piece by Megan McArdle.  TWM Marketing's link to the Mcardle piece is broken so use the one provided in this post. McArdle's initial premise is that there is no legitimate reason why we should be able to direct our property after we die.

 I've raised this question before when discussing whether inheritance is a right or privilege.  McArdle takes it further by suggesting that property ownership should revert back to the government at death.   McArdle really does a thoughtful analysis, and then acknowledges her own limitations by referring to Chesterton's fence.  I hadn't heard of this before, but it gets to the heart of why I am leery of black and white arguments and quick pronouncements.  Basically, Chesterton's fence stands for the proposition that you lack qualification to propose the destruction of something if you don't understand its purpose.  So, if you acknowledge you don't see a use for it, you are exactly the wrong person to suggest getting rid of it.  You only have the credentials to propose destroying something when when you recognize that someone created it for a reason and you can understand that reason. 

I don't know about my qualifications to make proposals about the right of inheritance.  In a later post I'll review some articles on the need for inheritance.  For now, I can see some problems with McArdle's idea of a 100% estate tax.  Assuming that the government won't take (and we don't want it to have) the actual assets, most assets will have to be liquidated to pay the tax.  What happens to your partner if your heirs are forced to liquidate your interest in the business?  Who would be responsible for the liquidation? If an executor or personal representative is tasked with selling everything and giving all the proceeds to the government, why would anyone take on that job?  Now most personal representatives are family members tasked with transferring the property to themselves or other family members.  Without that incentive, would we then have a new type of tax collector, like a bankruptcy trustee?

Doesn't this just encourage everyone to gift property before death? 

On a more mundane note -- which government can make  a claim?  Is it the federal government, the state, a municipality?  What if one is a dual citizen or a citizen of one country/state and resident in another?  Which government has a right to the property?  Some of these questions persist even in our current system of estates and inheritances, but they would prove harder to answer if the estate tax was set at 100%.