Wrestling with Decoupling

Trusts & Estates, Vol. 145, No. 2, February 2006

Posted: 10 May 2006

See all articles by Jeffrey A. Cooper

Jeffrey A. Cooper

Quinnipiac University School of Law


The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) dealt a fiscal blow to state governments by repealing the state death tax credit, a mechanism by which the Federal government effectively shared estate tax revenues with the states. Between 2001 and 2005, the repeal gradually took effect and is now complete.

When EGTRRA repealed the state death tax credit, it also effectively repealed all state estate taxes calculated by reference to that credit. This change impacted state estate taxes nationwide and completely eliminated 38 state estate tax regimes. In a process known as "decoupling," some of the affected states have responded by imposing new, independent, state estate taxes.

This brief Article highlights three areas in which this decoupling of Federal and state death tax regimes has impacted modern estate planning: (1) forcing estate planning lawyers to rethink the fundamental structure of modern estate plans, (2) dramatically increasing the potential tax savings to be achieved by taxpayers changing their state of domicile, and (3) imposing new administrative burdens on decedent's estates.

Keywords: EGTRRA, decoupling, state estate tax, domicile, estate planning

JEL Classification: H20, H70, H71, H72, H73, H77, K34

Suggested Citation

Cooper, Jeffrey A., Wrestling with Decoupling. Trusts & Estates, Vol. 145, No. 2, February 2006, Available at SSRN: https://ssrn.com/abstract=900395

Jeffrey A. Cooper (Contact Author)

Quinnipiac University School of Law ( email )

275 Mt. Carmel Ave.
Hamden, CT 06518
United States
203-582-3731 (Phone)

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