by Francis Burton Doyle, Esq., WealthPLAN

    Since the beginning of 2013, the federal estate tax exemption has exceeded $5 million per person.  The current per person exemption for 2015 is $5,430,000. This means that a married coupled combined federal estate tax exemption is $10,860,000 dollars.  In addition, the federal estate tax law has been amended to allow “portability of exemption” between spouses.  This means that the unused exemption of a first spouse to die can be preserved for use at the surviving spouse’s death.

         One of the purposes of these changes was to allow married couples to simplify their estate plans.  For example, because of the large federal estate exemption and portability, married couples with a combined net worth of almost eleven million dollars can leave their entire estates to a surviving spouse with estate tax impunity.  Gone are the days when couples had to establish a “By Pass” Trust in order to preserve the estate tax emption of the first spouse to die.

        The opportunity to leave one’s entire estate to a surviving spouse may not conform to a client’s desire. This is particularly true in the case where the client has children from a prior marriage and wants to protect her children’s legacy.  For many clients, the opportunities afforded by the new estate tax rules must be evaluated against the desirability of preserving the inheritance of children and a client’s other heirs.  Striking this balance requires estate planning practitioners to carefully counsel their married clients on the various ways a client can provide for her surviving spouse and yet protect her children’s inheritance. In many instances a trust, which provides for a surviving spouse during his lifetime, but distributes the assets remaining in the trust to the client’s children or other heir may still be a client’s best alternative.

The Take Away Today:
The lure of simplicity afforded by the new estate tax rules may not be the best estate planning alternative for many married clients and it is the task of the estate planning practitioner to carefully work with and carefully counsel clients on the question of whether a simple plan devising the client’s entire estate to a surviving spouse is really the client’s best alternative.

Quote to Ponder
“Live as long as you may,
the first twenty years are the longest half of your life.
They appear so while they are passing;
they seem to have been so when we look back on them;
and they take up more room in our memory than all the years
that succeed them.”
~Robert Southey

About the Author:

image001Francis Burton Doyle, Esq., is the founder of WealthPLAN, with over 30 years of experience in Tax, Estate-Planning Probate, Trust Administration and Litigation. He is Certified Legal Specialist in Taxation Law and Probate, Estate Planning and Trust Law (California State Bar). Frank is the Past President of both the Santa Clara County Estate Planning Council & the Silicon Valley Planned Giving Committee. Frank is also the Past Chair of the Annual Jerry A. Kasner Symposium, Planning Committee, Santa Clara University, School of Law. Mr. Doyle provides all the course development and instruction for the Advanced Legal Training Institute.


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