Some Tax Cuts May Go, But Portability Likely to Stay
According to the Wall Street Journal, a number of legal experts agree that portability, which allows a surviving spouse to add the unused portion of their deceased spouse's estate tax exemption ($5.12 million this year) to their own, will be extended or even made permanent.
Part of the Tax Relief Act of 2010, portability is just one of the many tax cut provisions that are set to expire at the end of 2012. However, since it enjoys widespread bipartisan support in Congress, many say it will likely continue into 2013 and possibly beyond.
Portability is available only to married couples and is not automatic - when one spouse dies, his or her estate executor must pass the unused exemption on to the surviving spouse via an IRS portability election filing. If the surviving spouse remarries, portability only applies to the exemption of the new spouse.
Portability applies to lifetime gifts as well as assets that pass through an estate plan, and does not apply to the exemption from the generation-skipping transfer tax.
The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0042.