Planning for the $5-$10 Million Couple: Portability or Credit Shelter? by Sloane J. Hankins and Samantha Moore

More now than ever before, planning has become a crucial factor in managing one’s estate. Sloane Jumper Hankings and Samantha Moore of Butler Snow LLP have commented on the new reality that is the “$5-$10 Million Couple” and how they can prepare for the future. They say,

While the relevance of the credit shelter trust has been a hot topic for the past three years, the estate planning community has come to the conclusion that, while the credit shelter trust is not the gold standard that it was prior to 2010, it is still a handy tool in an estate planner’s toolbox.

The credit shelter trust shields the assets (including appreciation) from estate tax on the surviving spouse’s death, but does not allow for a basis step-up on those assets on the surviving spouse’s death.  In other words, the decision whether or not to utilize a credit shelter trust or rely on portability is primarily a question of whether it would be cheaper to pay estate taxes or income taxes, which primarily depends on a couple’s assets.  A couple with total combined assets close to $5 million and whose children intend to sell the assets following both spouses’ deaths might benefit more from portability.  However, a couple with appreciating assets may benefit more from the credit shelter trust primarily because, as stated above, the DSUE amount is not indexed for inflation.

Read the entire post here: Planning for the $5-$10 Million Couple: Portability or Credit Shelter?

Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal