Tips on Post-2010 Tax Act Matrimonial and Estate Planning Considerations

Tips on Post-2010 Tax Act Matrimonial and Estate Planning Considerations

By: Martin M. Shenkman, CPA, MBA, JD

Matrimonial Planning

If portability is made permanent, (i.e., the sunset in 2013 is avoided) then planning for the use of estate tax exclusions will become a significant factor in marital planning. The numbers could be simply too large to ignore. Perhaps the new meaning given to the phrase “marriage of convenience” will be to refer to a couple who married so that the wealthy spouse, for a fee, could avail himself or herself of the estate tax exclusion of the new impoverished spouse. Imagine the want adds: “Elderly, infirm, preferably terminally ill, male spouse needed. Will cover all costs of obtaining U.S. citizenship and provide $100,000 bonus to your heirs. Must be poor and remain poor throughout the marriage.”

If, in fact, the position posited by some tax experts, that the gift use of unused exclusions is not limited to only one prior spouse, Henry VIII syndrome could become common. People convicted of murder or involuntary manslaughter, in many states, cannot inherit from their victims; the law calls them slayers. If a court finds enough evidence for the two charges, it can rule a person a slayer without a conviction. Will such concepts be applied to limit not an inheritance, but the use of an exclusion?

See related tip on planning for prenuptial agreements.

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