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LEARNING RESOURCES

Estate & Trust Primer — Tax Staff Essentials
(like real estate, business interests, and high-
growth stock). Strengthen your knowledge of strategic estate
■ Assets held in the trust will generally have asset planning.
protection from creditors of the surviving spouse CPE SELF-STUDY
and children — as long as the assets remain in
the trust.
■ The trust provides control and assurances that
the assets will go to the children and other
beneficiaries as intended and, at the same time,
protects against the possibility that a surviving
spouse may seek to redirect assets to nonin-
tended beneficiaries. Estate Planning Certificate Program (Exam +
Course)
What about portability rather than a bypass trust The Estate Planning Certificate Program is an
to preserve ‘both’ lifetime exemptions? informative and engaging learning experience that
will enhance your knowledge of estate planning.
This is a question that is being raised more
frequently as estate planners are learning that por- CPE SELF-STUDY
tability can, in many cases, be a simpler and more
efficient way to maximize the benefits of the two
lifetime exemptions. Section 303 of the Tax Relief,
Unemployment Insurance Reauthorization, and
Job Creation Act of 2010, P.L. 111-312, indicates For more information or to make a purchase, go to
how easy it can be to elect portability to preserve aicpa.org/cpe-learning or call the Institute at 888-777-7077.
the exemption of the first estate. This is confirmed
in the instructions for Form 706, United States
Estate (and Generation-Skipping Transfer) Tax Re-
turn, which state that the election can be made to surviving spouse’s estate will generally be
preserve any unused exemption by simply “timely allowed a second step-up in basis for federal
filing a complete Form 706” for the first estate — income tax purposes. Conversely, if the assets
whether or not a tax return is actually required. had been put in a regular bypass trust, basis
Of course, many will bristle at the thought of step-up would be allowed only one time, upon
having to file a tax return when it is not required by the first spouse’s death.
law. However, the cost and effort needed to prepare At the time of this writing, there is too much
a federal estate tax return should be weighed against uncertainty regarding potential tax changes for
the potential estate planning benefits with the help married taxpayers to be able to confidently choose
of a tax professional. Some will be surprised to learn their best overall planning strategy. The bypass trust
that the cost of preparing a tax return could be and portability appear to be the two leading options
minuscule when compared to the enormous estate available to minimize their estate tax. However, to
tax savings that can be achieved by a surviving be able to choose between them, much guesswork
spouse when a second lifetime exemption (upwards is needed because of the two huge unknowns
of $12 million) is preserved. mentioned earlier:
■ What will the amount of the federal estate tax
Advantages of portability over a regular bypass and lifetime exemption be?
trust ■ Will the basis step-up be eliminated, which
Aside from being another effective way to preserve would increase liability for capital gains taxes?
the full lifetime exemptions, there are other reasons
some surviving spouses may prefer portability over Enter the marital disclaimer trust
establishing a bypass trust. These include: For some couples, a wait-and-see strategy might
■ Electing portability avoids the costs associated be best. When having their wills prepared, married
with creating, funding, and administering a taxpayers may wish to ask their attorney how to
bypass trust, as well as the requirements for trust cover all their bases in view of the current uncer-
accounting and filing annual tax returns, etc. tainties involving the tax code and estate taxes. They
■ If portability is elected, the assets in the might ask if there is a way to wait until later,

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