The truth is that if you expect to live more than a few years and you spend more than ~1% of your wealth per year, you can't use the buy-borrow-die strategy. Th

The truth is that if you expect to live more than a few years and you spend more than ~1% of your wealth per year, you can't use the buy-borrow-die strategy. The loan interest will eat you alive long before you die. Compounding works against you here. (You can't just charge 0% interest either, the IRS thought of that and they set minimum rates.) If you just pay capital gains instead, you can spend a lot more before you die. And what good is money you can't spend before you die? Buy-borrow-die only makes sense if you are super wealthy (like $100m+) and don't want to touch the money while you are alive, but you want to maximize how much you pass on to your family after you die (when stepped-up basis kicks in to erase the capital gains tax). It's way overblown; it's really not something most rich people are going to do. But I would be in favor of eliminating stepped-up basis on death to get rid of it.