The American Tax Relief Act of2012 (ATRA) brought a lot to the table in regards to estate planning. Oneplanning topic of interest brought on by ATRA is the permanence ofâ€œportability.â€
While the concept ofâ€œportabilityâ€ is not entirely new, it is a fairly important tax concept for allmarried couples.
In fact, a recent Forbes article titled â€œEstate Tax Portability - New Paradigm ForEstate Planningâ€ is a primer of sorts for couples still unfamiliar withthe concept now become law. Practically speaking, with the advent ofâ€œportability,â€ most married persons do not need to worry about maximizing theestate/gift tax exemption of each spouse. Formerly, couples had to craftspecial trusts and other devices to ensure the opportunity to shelter theircombined estate/gift tax exemption amount.
Under ATRA the estate/gift taxexemption amount for each spouse is â€œportableâ€ between spouses. Consequently,not only can the surviving spouse inherit all of the coupleâ€™s assets, but caninherit the exemption amount attributed to the deceased spouse. Thisâ€œportabilityâ€ benefit is not automatic and what appears simple can becomecomplex.
The surviving spouse is requiredto file the correct tax forms (i.e. IRS Form 706) to claim the unusedestate/gift tax exemption of the deceased spouse. Fail to do the paperwork andyou fail to get the benefit of portability.
At IdahoEstate Planning we are the expertsyou need to know and trust. Work with us and we'll put together a plan thatworks for you and your loved ones. Remember, goodplanning is no accident.