At the very last moment...actually a bit after the last moment..the Senate and then the House
passed a new bill to avoid the fiscal cliff which also brought some stability to the issue of
the Federal Estate and Gift tax.
This is the first in a series of news releases and articles which will examine what changes
occurred, how they might effect you, and what you should do about it.
Check back regularly as we add more links to more related topics.
Portability
The American Taxpayer Relief Act makes permanent “portability” between spouses. Prior to the
permanent extension, portabil- ity was only available to the estates of dece- dents dying after
December 31, 2010 and before January 1, 2013.
IMPACT. Portability allows the estate of a decedent who is survived by a spouse to make a
portability election to permit the surviving spouse to apply the decedent’s unused
exclusion (the deceased spousal unused exclusion amount (DSUE)) of up to
five million dollars to the surviving spouse’s own transfers during life and at death.
MYTH. This makes many people feel that they don't need trusts in their estate
planning anymore since the survivng spouse can inherit up to 5 million of additional shelter
amount from the deceased spouse.
CONSIDER. You might still want to use a trust at the death of the first spouse where you
1) have children from different marriages, 2) want to protect the surviving spouse and children
from remarriage and divorce, lawsuits, and loss of cognitive skills.
David M. Frees III focuses his practice in the areas of representing families, executives and
business men and women in their estate planning and in representing trustees and executors
in the administration of trusts and estates.
He can be reached at 610-933-8069
