The federal estate tax exclusion amount is $5.25 million for 2013, and this amount is indexed for inflation in future years. For married couples, any estate tax exclusion that is unused upon the first spouse’s death may be transferred to the surviving spouse, who can thereafter use the deceased spouse’s unused exclusion (DSUE) amount against the surviving spouse’s gifts during lifetime and transfers upon death. This new system permitting the transfer of exclusion is called "portability". Both the large estate tax exclusion amount and portability are now permanent features of the federal estate tax law.
In response to these fundamental changes, we have considered alternatives to the traditional estate planning approaches. This Client Alert explains three new planning suggestions for married couples in the wake of these changes. Please call us to discuss whether these suggestions would be useful in your situation.