5 Reasons You Shouldn’t Rely on Portability Alone to Pass & Protect Assets

9:41 pm Asset Protection, Estate Planning

marriage and money 150x150 5 Reasons You Shouldn’t Rely on Portability Alone to Pass & Protect AssetsLast January’s fiscal cliff tax deal ushered in a great estate tax break for married couples: permanent portability. This allows surviving spouses to add any unused portion of a deceased spouse’s lifetime exemption to their own $5.25 million tax-free exemption.

However, married couples need to be aware that portability will not necessarily cover all the bases when it comes to passing and protecting assets.  A recent post at Wealth Strategies Journal outlined five reasons that failing to also integrate traditional estate planning methods into your plan could have adverse consequences:

1.  The surviving spouse that inherits may then distribute assets in a way that the deceased spouse have never intended or would not have approved.

2.  Creditors may gain access to the assets of the deceased spouse at some point.

3.  If a surviving spouse remarries, he or she will lost the first deceased spouse’s unused exemption amount if their second spouse predeceases them.

4.  The assets inherited by a surviving spouse could use up more of his or her estate tax exemption due to appreciation.

5.  The portability law could be changed or even eliminated.

If you need help with asset protection, contact our Costa Mesa law firm.

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