Exciting Tax Break for Married Couples
If the headline does not get you, what will. I've blogged in the past about the term "portability" of the estate tax that was introduced in the 2010 tax bill passed last year.
The portability concept really is an estate tax break for married couples, especially second, third and fourth marriages. The reason is that married couples won't have to split their assets evenly amongst themselves to ensure they fully use both estate tax credits available. Prior to this year, a proper estate plan evenly divided a couple's assets between them so that they each would utilize the estate tax credits. The downside to this was that clients had to continuously monitor the value of their assets and redistribute their assets should one spouse's asset increase faster than the others. This task is much easier said than done as most clients do not review their estate plans on a regular basis.
With portability in place, you no longer have to divide assets, you just have to file a 706 upon a client's death. The 706 return is the estate tax return. Although no estate tax is required, the return puts the IRS on notice that the unused estate tax credit from the first spouse is being "transferred" to the surviving spouse so that they may use it upon their death.
To read more on portability, please read "How To Use The New Tax Break For Married Couples."
To learn more about the current state of the estate tax, please contact our estate planning attorney at Wood, Atter & Wolf, P.A. in Jacksonville and Ponte Vedra Beach, FL.
