7.3 Marital Deduction and Portability

• Library: A Lawyer's Guide to Estate Planning: Fundamentals for the Legal Practitioner (ABA) (2018 Ed.)

7.3 Marital Deduction and Portability

Prior to the introduction of "portability" into the federal estate tax law, it was essential that trusts be utilized to take advantage of the marital deduction and use of the full exclusion amount of both spouses. Trusts were the preferred vehicle for this type of planning, as discussed in Chapter 5, at 5.21, under the A-B trust planning approach. There is no longer a basis for this concern. Utilization of the full marital deduction no longer results in the loss of the exclusion amount from the estate of the first spouse to die. This portability, or carrying over, of the exclusion amount from the first spouse to die to the estate of the second spouse to die ensures the maximum use of the exclusion amounts without the awkwardness of what was rather technical trust drafting.

Tax planning today involves a consideration of both income tax consequences and potential estate tax...