Use These Math Shortcuts in Estate Planning

To the dismay of many young lawyers, estate planning inevitably requires some math — and it can get tricky. For example, see the annuities valuation formula at Reg. §25.2512-5(d)(2)(v)(A)(1)(i) Figure 1. A century ago, in Edwards v. Slocum, Supreme Court Justice Oliver Wendell Holmes, Jr., sardonically warned (quoting the Second Circuit’s decision) that “algebraic formulae are not lightly to be imputed to legislators.” Not long after, perhaps piqued by the Court’s insult, Congress passed legislation effectively requiring algebraic formulae to compute estate tax in some cases. To quote Reg. §20.2055-3(a)(2): “[T]he computation becomes highly complicated.”

Trust and estate ...