Posts tagged Portability
IRS Grants Temporary Relief on Portability Election

This week the IRS released Revenue Procedure 2014-018 that temporarily allows an executor of an estate to make a late portability election. Starting with deaths that occurred in 2011, a surviving spouse is allowed to “port over” the unused portion of the estate tax exemption of the deceased spouse. This has become known as Portability. To avail himself or herself of the benefits of Portability, the surviving spouse is required to timely file an estate tax return (Form 706) within nine (9) months of the date of death.

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The Pros and Cons of Portability Part II - The Continued Importance of a flexible Credit Shelter Trust

Last week I discussed some of the pros and cons of Portability, the federal law recently made permanent, which allows the surviving spouse to carry over the unused portion of the deceased spouse’s estate tax exemption amount. My conclusion was that while Portability is a good back-up plan, for a variety of reasons it should not be the first line of defense against estate taxes. I continue to believe that the first and best choice in planning to preserve both spouses’ estate tax exemption remains a properly drafted credit shelter trust.

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Pros and Cons of Portability

Starting with deaths that occurred in 2011, a surviving spouse can carry over the unused portion of the estate tax exemption of the deceased spouse. This is known as Portability. While Portability was originally only applicable if both spouses passed away in either 2011 or 2012, with the passage of the American Taxpayer Relief Act on January 2, it was made permanent (which really means that it is no longer scheduled to expire). So the question now is whether or not to rely on Portability as your sole estate tax planning tool. To answer that question, I think it is important to look at the Pros and the Cons of such a strategy.

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