Smith marries again to someone who then dies, using his full exemption, she loses her ability to inherit the exemption of her first spouse.
A third more significant disadvantage to using portability in your estate planning is what happens between the death of the first spouse and the death of the surviving spouse assuming no remarriage.
The inherited exemption does not increase. However, the assets that Mrs. Smith inherits from her husband could increase.
Assume Mrs. Smith dies 10 years after Mr. Smith and she still has portability. If invested wisely and not spent, her inheritance from her husband could double. If alternatively, Mr.
Smith created an estate plan that caused a trust to be set up when Mr. Finally portability is set to expire in although it could be extended , so any estate planning we create for our clients needs to be flexible. Determination of the estate for Oregon estate tax purposes is based upon the federal taxable estate with adjustments. Tax is tied to the federal state death tax credit to the extent that the available federal state death tax credit exceeds the state inheritance tax.
PA ST T. Pennsylvania had decoupled its pick-up tax in , but has now recoupled retroactively. The recoupling does not affect the Pennsylvania inheritance tax which is independent of the federal state death tax credit. Tax frozen at federal state death tax credit in effect on January 1, , with certain adjustments see below. Tax was permanently repealed effective as of September 15, when Chapter of the Texas Tax Code was repealed. Prior to September 15, , the tax was tied to the federal state death tax credit.
VT ST T. On June 18, , Vermont enacted H. The Virginia tax was repealed effective July 1, Previously, the tax was frozen at federal state death tax credit in effect on January 1, The tax was tied to the current federal state death tax credit, thus reducing the tax for the years - and eliminating it for the years - Hemphill v. The Governor signed the legislation. Washington voters defeated a referendum to repeal the Washington estate tax in the November elections. Washington permits a separate state QTIP election.
Washington State was supposed to index the exemption annually for inflation. However, this was not done for This resulted in no increase in the applicable exclusion amount for and On April 15, , the Wisconsin governor signed Wis.
Previously, Wisconsin would impose an estate tax with respect to the intangible personal property of a non-resident decedent that had a taxable situs in Wisconsin if the state of domicile of the non-resident had no state death tax.
State Death Tax Chart. Updates may be sent to cfox mcguirewoods. State Type of Tax. Connecticut Separate Estate Tax. District of Columbia Pick-up Only. No separate QTIP election. Effective July 1, , the Georgia estate tax was repealed. Hawaii Modified Pick-up Tax. In very recent news, former President Bill Clinton and Speaker John Boehner have both advocated extending the current law for one year. How to plan in this environment? This is particularly critical if you have assets such as a closely held business or other such assets susceptible to valuation discounts.
We do envision that valuation experts will be exceedingly busy and there will be a rush to make gifts at calendar year-end.
We encourage you to beat the rush and contact your estate planning attorney now to begin the process and take advantage of this opportunity. These materials provide general information which does not constitute legal or tax advice and should not be relied upon as such.
Particular facts or future developments in the law may affect the topic s addressed within these materials. Always consult with a lawyer about your particular circumstances before acting on any information presented in these materials because it may not be applicable to you or your situation.
You should not provide confidential information to us until Reinhart agrees to represent you.
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