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Estate Tax – Portability

estate planning, last will and testament



In addition to taking a bite out of your income, helping himself to a hearty slice of your payoff from nearly every business transaction, and even nibbling on your gifts, Uncle Sam wants his share of the estate you leave behind when you die. It’s not death or taxes — it’s death AND taxes, and the dead can pay up just as well as the living where the government is concerned.

Thankfully, we have some good news. Tax exemptions can help you keep Sam’s cold, clammy hands off your hard-earned pennies up to a certain statutorily determined threshold. For purposes of estates, you may avail yourself of a federal tax exemption on up to $5 million, a nice chunk of change to be sure, but not enough for many. And that’s why there’s roll over. No, I’m not referring to a cheap sales tactic, but to a legal mechanism by which the unused portion of a deceased spouse’s exemption may be transferred to the surviving spouse.

This applies to all you married folks, so pay attention. Homer worked hard all his life, achieved the American dream, and died with $3 million worth of assets, using $3 million of his permitted $5 million estate tax exemption. Marge, Homer’s beloved wife, was no slouch herself. Balancing the demands of family and career, Marge quickly advanced in the workplace, outpacing her male colleagues, and retired with an estate worth $7 million dollars. Adding Homer’s unused $2 million estate tax exemption to her own $5 million estate tax exemption, Marge was able to avoid paying taxes on the entirety of her estate.

Seems simple enough, but, like anything that concerns good old Uncle Sam, there are steps you must follow and hoops you must jump through to claim this exemption. The law firm of Grigaltchik & Galustov, P.A. is happy to jump through all the hoops along with you.


Disclaimer: The law that is the subject of this article may be repealed or changed pursuant to an act of Congress on or about January 1, 2013.