Planning to minimize the risks and maximize the rewards of the estate portability election

William A. Duncan, John O. Everett, William A. Raabe

Research output: Contribution to journalArticle

Abstract

Estate tax planning has been changed substantially with the enactment of the carryover of unused estate tax exclusion amounts from the first spouse to die to the estate of the second spouse. Termed portability, the availability of the deceased spouse's unused exclusion amount (DSUEA) largely eliminates the need for most taxpayers to conduct a series of lifetime asset transfers to balance estates and maximize the use of the exclusions. It also opens an opportunity for a double basis increase adjustment, one when the first spouse dies and a second when the surviving spouse dies. Where the DSUEA is sufficient to offset the additional inclusion from estate taxation in whole or in part, there may be an advantage to using the marital deduction to avoid inclusion in the tax base until the second demise. We explore the combination of estate asset values, appreciation expectations, and appropriate properties within the context of planning with the portability election, as well as the risk variables associated with such planning strategies.

Original languageEnglish (US)
Pages (from-to)65-81
Number of pages17
JournalATA Journal of Legal Tax Research
Volume13
Issue number2
DOIs
StatePublished - Jan 1 2015

Keywords

  • A/B trust
  • Basis step-up
  • DSUEA
  • Estate tax
  • Exemption equivalent
  • Portability

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Law

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