New Portable Estate Tax Credit not to be Relied on as Estate Plan's Main Feature

  • United States
  • 03/12/2013
  • Fowler White eNews

Joseph T. Ducanis, Jr., in a guest column appearing in the Daily Business Review, discusses the new estate tax credit portability rule, which means that if a husband or wife dies, the surviving spouse can elect to use whatever portion of the estate tax credit the first dying spouse fails to use.

Mr. Ducanis notes a key hurdle, among others, to overcome may be a special rule Congress included that means that the portable credit you thought you brought over when a spouse died really does not exist at all. You need to be very careful should you re-marry. Basically, the rule says that, if you survive your first spouse, elect portability, re-marry, and then survive your second spouse, the portability from the first spouse vanishes.

Mr. Ducanis, a shareholder in the firm’s Wealth Preservation, Trusts and Estates Practice, also expresses the belief that methods that are more traditional should be considered and it might be best to view portability as a fall-back position when estate planning has not been carefully considered.