Estate tax portability a huge benefit for married couples, P.2

In our previous post, we began looking at estate tax portability, which allows widows and widowers to carry over any unused portion of their estate tax exemption amount and apply it to their own estate at their death.

We noted that it is necessary for the executor of the deceased spouse-often the surviving spouse-to file an estate tax return in order for the surviving spouse to take advantage of portability. Here we want to mention the use of portability within the gifting context.

Beginning this year, the current $5 million exemption amount can be used to transfer assets during life or at death. Under IRS rules, those wishing to use the exemption amount for lifetime gifting must keep records and report gifts to the IRS. The amount used for gifting will be subtracted from the amount available at death.

Married couples have the additional advantage of being able to give more to their children in lifetime gifting by using the gift-splitting technique. Gift splitting allows married people to gift their exemption amount to the same person, giving that person twice as much.

One of the possibilities for married couples, particularly those where one party doesn't need their $5 million exclusion, is to set up an arrangement where both exclusion amounts are combined and used for lifetime gifts. The wealthier spouse would then be able to give more to his/her children free of tax.

Taking advantage of the tax exemption amount through portability and gifting opens up possibilities for married couples of which they may wish to take advantage. Consulting an experienced attorney will be a great asset toward that end.

Source: Forbes, "How To Use The New Tax Break For Married Couples," Deborah L. Jacobs, August 21, 2011.

No Comments

Leave a comment
Comment Information

Mr. Teiger, Thank you very much for your time and results. I will definitely recommend you & your firm to anyone who wants to be treated professionally courteously and needs results.Hope all is well.Again...thank you. Regards, Paul L.

msg iconEmail Us For a Response

When you have legal questions or concerns, contact our team at Teiger Law Center, P.C., by calling 678-374-7645, 800-780-2275 or reach us via email by completing our online contact form. From our Cumming and Alpharetta law offices, we represent clients in the Atlanta metro and throughout north Georgia.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Cumming Office
514 West Maple Street
Suite 101
Cumming, GA 30040

Toll Free: 866-726-2153
Phone: 678-374-7645
Fax: 770-406-8858
Cumming Law Office Map

Alpharetta Office
12600 Deerfield Parkway, Suite 100
Alpharetta, GA 30004

Toll Free: 800-780-2275
Phone: 678-374-7645
Fax: 770-406-8858
Map & Directions