A new portability clause in the American tax laws is good news for estate planning but likely cannot be relied upon permanently.<\/p>\n
The provision allows a surviving spouse to claim any exemption not used by their deceased spouse on their own estate tax return. Since the exemption in 2011 was $5 million, a widow left with a $3 million estate owes no taxes. But then when the widow passes, the remaining $2 million can be added to the same $5 million ceiling. This means the widow\u2019s estate is exempt for up to $7 million, according to Forbes.com.<\/p>\n
This portability of estate exemption is simple compared to the tax maneuvers some estates attempt to avoid these taxes, and it was praised by tax lawyers upon signing. Unfortunately, the portability option concludes at the end of 2012, so it is only helpful to people who happen to lose a spouse in this calendar year.<\/p>\n