» Hook Law Center Estate Planning Attorney Discusses Estate Tax Portability And How To Claim It

Hook Law Center Estate Planning Attorney Discusses Estate Tax Portability And How To Claim It

Virginia Beach, VA (Law Firm Newswire) September 24, 2013 – Estates that do not use their entire estate tax exclusion allowance may pass on the remainder to a surviving spouse, but the process is not automatic.

Hook Law Center (formerly Oast & Hook)

Hook Law Center (formerly Oast & Hook)

Called “portability,” the rule was made permanent as part of the American Taxpayer Relief Act of 2012 (ATRA). But Virginia estate planning attorney, Andrew Hook, cautions that an estate tax return must be filed in order for the surviving spouse to claim portability.

“Not every estate is required by law to file an estate tax return,” Hook said. “But the IRS has made it clear that the portability election may be made only after properly and timely filing an estate tax return. No special statement or checking any box is necessary, but the return must be filed. The due date is nine months from the decedent's date of death, but an automatic six-month extension is available.”

For 2013, the first $5.25 million in value of a decedent's estate – the “exclusion amount” – is not subject to federal estate taxes. The figure is indexed to inflation for future years. If the decedent's estate is valued under the exclusion amount, the difference between the two figures is “portable” to their surviving spouse. Thus, when the surviving spouse later dies, their estate is eligible for the standard exclusion amount for that year plus the amount left unused by the earlier estate.

“Prior to the portability rule, people could often achieve similar results, but it took careful advance planning, usually involving creating trusts and re-titling property,” Hook added.

Any rule Congress makes may be undone, and some may wonder if the portability really is permanent.

“Given that alternative strategies exist, and the rule really just makes portability more convenient, I see little incentive for Congress to repeal this law,” said Hook. “I believe portability is here to stay.”

Estate tax returns can be complex and difficult to complete accurately and on time by a grieving spouse, particularly if they had little to do with the couple's finances.

“Following the death of a loved one – or preferably before – I recommend consulting an experienced estate planning attorney, even if you think you have no chance of being subject to estate tax,” Hook cautioned.

Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
Phone: 757-399-7506
Fax: 757-397-1267

5806 Harbour View Blvd.
Suite 203
Suffolk VA 23435
Phone: 757-399-7506
Fax: 757-397-1267

  • Using Person-First Language to Communicate With and About People with Special Needs
    About 54 million Americans, or 1 in every 5 people, report having a disability. Most Americans will experience a disability at some point, and for many, the disability will occur very suddenly and unexpectedly.  It could happen to anyone, at any time.  As special needs attorneys, we aim to give individuals with disabilities a voice, […]
  • Be aware of the details on required minimum distributions
    It is important for taxpayers to be informed about required minimum distributions (RMDs) from IRAs so that they can plan accordingly for their retirement. In the current year, those persons age 70 ½ or older are required to take a RMD from their traditional IRAs (Individual Retirement Arrangements), SEP (Simplified Employee Pension) IRAs, SIMPLE (Savings […]
  • Musings on Financial Aid
    My oldest child is a senior in high school, and we are filling out the financial aid forms for the first time. There has been a big change in the world of collegiate financial aid. In prior years, the Free Application for Federal Student Aid (FAFSA) form was released on January 1 and required families […]
  • Cruising through Caregiving – Book Review
    Cruising through Caregiving is a terrific book helping all those who have cared for or will care for someone in their family through the aging process deal with the stress of serving in such a capacity. The thrust of her book is that there are many roles to play, but all should be played WITHOUT […]
  • Planning for Small Business Owners Is Critically Important
    At times we all fall victim to focusing on the present at the expense of planning for the future. Many business owners continually focus on the daily, monthly, quarterly, and annual goals of the business and often do not consider what would happen if they, or one of their key team members, would suffer and […]

See other news sources publishing this article. BETA | Tags: , , , , ,

Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required