Tax, Portability and Exclusion Planning for 2014 Plus Pros and Cons of Portability

Portability and Exemption Planning for 2014

For the next year, portability may diminish the necessity to preserve a spouse's unified credit and thus eliminate the need for planning which involves exclusions and credit shelter trusts.  For 2014, a spouse will inherit their deceased spouse's unused estate and gift tax exclusions. 

This portability may or may not be permanent and the exemption will be lost without planning to preserve the deceased spouse's unified credit.

Additionally, the representative for the estate must file a timely estate tax return, even if the estate is not above the current exemption amount, to preserve the deceased spouses unused exemption.   I am going to reiterate that a 706 Federal estate tax return MUST be filed to perserve the 1st to die's exclusion amount.

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