However, the question is not whether the surviving spouse should increase or decrease his or her standard of living, but whether the tax deferral is of any benefit to the descendants taking at the death of the surviving spouse. If it is assumed that the needs of the surviving spouse are fixed in annual amount, any increase or decrease in the future value of the estate will remain proportionate to the tax paid at the first death and, as already demonstrated, if the future value of the estate is proportionate to the tax paid, there is no benefit to tax deferral. The answer is that there are several factors that make long-term calculations extremely uncertain. As long term considerations become more speculative, short term considerations become more important. Future economic conditions almost never turn out as expected, which is why future values are so difficult to project with certainty.
Tax laws can change rapidly and unexpectedly.
Counting the Tax Reform Act of 1976, there have been at least six major tax acts in the last 17 years, several of which made fundamental changes in rates, deductions, and credits. A lawyer who recommends that a client elect to pay a tax that is reduced or repealed the following year will feel very silly. Family situations can change. Marriages, divorces, deaths, and births can all alter taxes and estate plans in unexpected ways. A sudden and severe illness might also reduce a family fortune through large and long-term medical expenses.