Toward the end of a Wall Street Journal article about trial lawyer Jim Ferraro's $27 million, 23,000-square-foot, 20-bathroom compound on Martha's Vineyard comes this:
He signed the property deed over to a grantor trust set up for his family and now rents the home from the trust, paying about $95,000 a month—a system Mr. Ferraro admitted helps him take money out of his estate and allows him to avoid estate taxes down the line.
Another good argument for repeal of the estate tax.
If you think about the way this works, the more expensive the house, the higher the rent the trust can charge the tenant, and the greater the tax benefits. It's just a slight variation on the overall effect of the estate tax, which is to give a tax preference to consumption now rather than saving for the future, while enriching lawyers and accountants who give advice on how to get around it with techniques such as the one used by Mr. Ferraro.