When Advising Clients on Portability
Are You Just Making a Judgment Call
Or Are You Doing the Math?
The choice of using Portability or a Bypass Trust has become perhaps the biggest estate planning and administration decision affecting married couples.
In advising clients, most estate planning professionals look to certain key factors, like the potential size of the estate and basis step-up when the surviving spouse passes - - then use a “SWAG” (super wild a—d guess) as to whether electing Portability or funding a Bypass Trust is better.
However, that kind of simplistic analysis and advice may wind up making the wrong decision for a particular client. Especially when a deeper, more definitive, mathematical analysis can be done and is appropriate.
When making the Portability vs. Bypass discussion, you need to know:
- The 7 strategies to consider when analyzing the mathematics of Portability
- The true value of basis step-up (including state income tax) and how this income tax consideration compares to potential estate taxes
- How the frozen DSUEA (Portability amount) can work against your client, given the estate tax exclusion is indexed for inflation
- How the type of martial bequest – outright, QTIP or Clayton QTIP – can affect this analysis
- The mathematical advantage of a general power of appointment
- How Grantor Trust status factors in
- How the GST exemption also fits into this analysis
- How to coordinate the portability decision with the planning to “stretch” an IRA
Learn all this and more by joining us and Robert Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA for a 90-minute presentation entitled, “The Mathematics of Portability”.