Portability: A Useful Estate Planning Tool by Robert Benjamin, Michael Clear, Karen Clute, Daniel Daniels and Helen Heintz 

A group of lawyers from Wiggin and Dana LLP have posted a primer article discussing portability and its effectiveness as an estate planning tool for married couples. The article begins,

The concept of “portability” in estate planning is the most substantial change to the estate planning landscape for married couples in recent memory. Introduced as a temporary feature by the 2010 Tax Relief Act, portability became permanent under the Taxpayer Relief Act of 2012. The IRS did not issue the final regulations governing portability until the summer of 2015, so the intricacies of using portability going forward are only now becoming clearer.

Portability is a tax election available to married couples that permits a surviving spouse to take advantage of his or her deceased spouse’s unused exemption from federal estate and gift taxes. In general terms, each person has a lifetime exemption from federal estate and gift taxes, which, prior to the advent of portability, you had to “use or lose”; that is, if a decedent did not make taxable transfers in life or at death of the full value of his or her lifetime exemption from federal estate and gift taxes, the unused exemption simply evaporated at his or her death. Now, by making the portability election, that unused exemption – the “deceased spousal unused exemption” amount or the “DSUE” amount – can be “ported,” or transferred, over to the surviving spouse, who may then use it to shelter his or her own gifts or estate from transfer taxes.

To read the entire post click here: Portability: A Useful Estate Planning Tool

Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal