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Larry Katzenstein talks proposed mortality assumptions on ACTEC Trust & Estate Talk podcast

September 6, 2022

St. Louis partner Larry Katzenstein was featured on a recent episode of The American College of Trust and Estate Counsel Foundation (ACTEC) Trust & Estate Talk podcast, where he offered details on the proposed new mortality tables under Section 7520. In the episode, "The IRS Updates Mortality Assumptions under Code Section 7520​," Larry talks to Lois Ann Stanton about the background and implications of the new tables.

The mortality tables which must be used to value life interests for many estate and charitable planning purposes show the rate of deaths occurring each in a defined population from birth to age 110. Section 7520 was enacted in 1989 and it requires that every 10 years the IRS update the mortality assumptions, based on the most recent mortality data available. 

After a delay in 2019, the IRS finally issued proposed regulations under Section 7520 updating the mortality assumptions that underlie so many of the estate planning techniques that wealth and estate management professionals use. Larry said, "Just to give you an example of the dramatic increase in longevity, at age 84 under the prior table there were 37,837 lives still left. Under the new table, there are 44,808 – or an increase of 6,971." 

Larry said there are interesting aspects and things to consider with the new tables such as the increased probability of surviving and the addition of decimal points that he said will produce more accuracy.

He also warned, "If someone is considering doing a charitable remainder trust now, they should get it done before the new tables are effective because people live less long under the old tables and therefore the remainder is worth more and the charitable deduction is more when you create a charitable remainder trust currently. That’s a really prime example of where you want to act quickly if you are going to be creating a charitable remainder trust."

Final regulations are expected in the next weeks to months.