2010 Tax Relief Act: New Concept Known as "Portability" is Introduced

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This is the next article in a series of e-Alerts that addresses how the new Tax Relief Act of 2010 (the “Tax Relief Act”) enacted on December 17, 2010 impacts you. The Tax Relief Act introduced a new concept to federal estate and gift tax planning known as “portability”. In a nutshell, portability is the ability for spouses to share their estate tax exemptions with each other by making certain elections in the estate of the first spouse to die. The portability provisions of the Tax Relief Act allow a surviving spouse to use the unused exemption from his or her deceased spouse to transfer property during life or at death free from federal estate tax.

Many of our married clients may be thinking that the new law, with its $5,000,000 exemption and portability provisions, eliminates the need for planning with a By-pass Trust* structure. Perhaps your impression is that bequeathing all of your assets to your spouse through a simple Will or ownership of jointly owned property is a suitable tax plan now.

Please see full article below for more information.

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