At a meeting of estate planners in Orlando this week, an estate planning attorney from Chicago parodied a Viagra commercial while imparting information on the portability provision contained in the 2010 tax law, which allows surviving spouses to add any unused estate tax exclusion of a deceased spouse to their own – enabling them to transfer up to $10.24 million tax-free.
Picture that romantic older couple in the Viagra ads while reading his parody:
For those couples who may experience a loss of applicable exclusion amount. Following the death of your spouse, you should use within 9 to 15 months to prevent a loss of exclusion. Using portability more than once may result in a decrease in benefits.
Portability is not for everyone. Consult your attorney before using portability. Portability is not a substitute for credit shelter planning. If you experience sudden appreciation of assets, you should not use portability. See your estate planning attorney immediately if your assets are subject to significant appreciation.
The benefits of portability may only last 11 months.
If you experience an election lasting more than 11 months, then portability may be permanent. There is no need to see your attorney, or a doctor. Permanent portability is beneficial.
If you experience dizziness, dry mouth, blurred vision, anxiety, breathing problems, chest pains, hallucinations, redness, blistering or peeling of the skin, or swelling of the hands or feet, none of these symptoms are caused by portability. What else are you taking?
Here are more details on what married couples need to know about portability:
- Portability applies only to those who die after Dec. 31, 2010.
- Portability applies to lifetime gifts as well as assets that pass through an estate plan.
- Portability is not automatic; the executor must pass the unused exemption on to the surviving spouse.
- If a surviving spouse remarries, he or she can only use the unused exemption of the new spouse.
- Portability does not apply to the exemption from the generation-skipping transfer tax.
- Couples with estates of less than $10 million can now leave everything to each other without a bypass trust – although if you want to shield assets from creditors or benefit children from a previous marriage, a bypass trust is still a good tool to use.
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