CFP® Practice Question: Understanding Portability
In giving a talk to a small audience on the topic of estate planning, someone asks you, as a financial planner, to provide some clarifying comments regarding the recent portability of the Applicable Exclusion Amount between spouses. You would be correct in making any of the following comments EXCEPT:
- While the 2012 Tax Relief Act made portability permanent, it has actually been around for some time, beginning in 2001.
- Like the Applicable Exclusion Amount, the DSUEA that is received from a deceased spouse is adjusted annually for inflation.
- While there is portability for estate tax purposes, there is NO portability for GST tax purposes.
- The DSUEA received from the estate of deceased spouse #1 will be lost if the surviving spouse remarries and is subsequently predeceased by spouse #2.
- The surviving spouse’s estate tax exclusion amount is equal to their “basic” exclusion amount plus their DSUEA.
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