An installment of the estate tax, collected during life

The federal estate tax has been in US law since 1916. The Estate Tax Prepayment Plan collects that tax in installments during life rather than in a single end-of-life event. Every dollar paid is credited dollar-for-dollar against the estate tax owed at transfer. Each year the holder pays whichever is smaller: the full statutory rate on wealth above the threshold, or the residual gap between cumulative prepayments and projected estate tax. When cumulative prepayments already cover projected estate tax, the year's top-up is zero — one continuous mechanism whose amount varies with the gap. Prepayments accumulate in nominal dollars (like withholding or quarterly estimated tax) and the Plan cannot collect more, in total, than the underlying estate tax would have been at death.

• Threshold. $10M individual / $20M joint (joint requires the filing testament).
• Brackets (v10.3 escalator). 0.75% on $10M–$50M · 1% on $50M–$250M · 1.5% on $250M–$1B · 2% on $1B–$10B · 2.5% on $10B+.
• Volatility excess. If cumulative prepayments end up exceeding actual estate tax owed (asset values fell), the excess attaches to the heirs' inherited basis as a credit — not refunded, not forfeited.
• Operating-asset protections. Working family-business operations and actively-farmed family-farm fractions are exempt. Illiquid wealth can defer to estate settlement at statutory interest — no forced liquidation.
• Disclosure window. A 36-month onramp for hard-to-discover assets opens with a Year 1 lifetime sweetheart rate (0.8% on the disclosed asset for the rest of the holder's life), tapering through Years 2–3 to standard rates + back-tax + penalties for undisclosed assets discovered later. See the legislative footnote below for the statutory regime.

Walk the math on a sample estate at /calculator/wealth.

Plainly: large estates pay the same bill early, in today's dollars. The time value of that money passes to the public instead of compounding in private hands — by design, with no discount to the taxpayer. It is a substitute for a standing wealth tax, not a favor.

The Plan does three things simultaneously.

(1) Current-year revenue. The rate genuinely collects. At the v10.3 escalator (0.75% on $10M–$50M climbing to 2.5% above $10B), large fortunes contribute meaningfully each year rather than waiting until death.

(2) A catalog. An annual prepayment requires an annual filing — what the holder owns, what each asset is worth, and how the value was reached. Decades before death, the major valuation questions are settled while the holder is alive to confirm them. Estates do not have to be reconstructed from scratch in probate; heirs do not fight the IRS over decade-old appraisals; the audit workforce reallocates from retrospective reconstructions to routine forward-looking compliance.

(3) A compounding dampener that reduces late-life expatriation pressure. Annual prepayment, paired with the capital-gains realization triggered by the share sales that fund it, slows the rate at which a fortune compounds untaxed. That dampening matters because the larger the at-death liability becomes, the stronger the incentive to expatriate in the final years of life to escape it. Steady collection throughout life reduces the size of the eventual settlement shock — and reduces the pressure to flee the tax base in old age.

A covered holder facing the Plan can stay, restructure inside US law, or expatriate. Restructuring is sharply narrowed by the rest of the architecture — the comprehensive-base income tax catches reclassified compensation, basis step-up is eliminated, dynasty trusts incur periodic deemed-accession, charitable shells are reached by the institutional excise, and the disclosure window plus heir-extension liability eliminates hiding. Expatriation is the only true exit.

What expatriation costs. US law already imposes an exit tax under IRC §877A: mark-to-market realization of all unrealized gains plus a deemed estate-tax event on net worth above the threshold, triggered the day the holder renounces citizenship or long-term residence. The Accord preserves and tightens that tax. Decades of prepayment credit against the §877A estate-tax event but do not avoid the mark-to-market on appreciated assets.

Does the wealth re-enter via heirs? Expatriation removes the holder, not the heir-side architecture. The accession tax fires on a US-person heir's lifetime accession ledger regardless of where the decedent died or where the wealth was held. An expatriated holder bequeathing to a US heir does not escape — the heir pays accession on receipt. The only complete exit is the entire family line expatriating and remaining non-US. A returning US person who received inheritance from a former US person's estate during their non-resident interval faces a deemed-accession event at US-tax-residence re-establishment — the inbound companion to §877A's outbound bracket. The rule is anchored to former-US-person estates rather than a generic 5-year look-back, so it does not touch foreign-family inheritance to naturalized US residents.

What keeps the base mostly here. Bounded liability (the Plan caps at projected estate tax owed); steady collection that prevents late-life liability from compounding into a one-time flight-triggering shock; and the civilization premium — settled property law, USD reserve denomination, the world's deepest capital markets, federal courts, the talent pool, the consumer market. Standalone wealth taxes (France pre-2018, Spain) saw meaningful capital and resident exits; this architecture is bounded, credited, rides on existing authority, and is paired with the §877A exit tax and the heir-side accession backstop.