Thursday, March 13, 2014
Jonathan G. Blattmachr (Pioneer Wealth Partners, LLC), Mitchell M. Gans (Hofstra University Law School), & Diana S.C. Zeydel (Greenberg Traurig, P.A.) recently published an article entitled, Supercharged Credit Shelter Trust Versus Portability, 28 Prob. & Prop. 11 (March/April 2014). Provided below is the introduction:
“Portability” is a new tax election available to married persons that permits the estate of the first spouse to die to elect that the decedent’s unused estate tax exemption (called the deceased spouse’s unused exemption amount or “DSUE amount”) be transferred or “ported” over to the surviving spouse who may use it to shelter the surviving spouse’s own taxable gifts or taxable estate. Whether a couple should rely on portability may be a complex financial matter. This article will compare the results of simply relying on portability with no further planning (the “Pure Portability Plan”) to (1) using portability coupled with an immediate gift by the surviving spouse of the DSUE amount to a grantor trust (the “Portability Plan”), (2) creating a traditional “Credit Shelter Trust” at the death of the first spouse to die, (3) using a Supercharged Credit Shelter Trust, and (4) using the spouses’ exemptions as early in lifetime as possible.