Estate tax-Portability
I just started reading Parlay your IRA into a familly fortune. Page 27-31 talks about the losing the estate tax exemption by leaving everything to your spouse. Didn’t he forget about portability between married couples in 2011 and 2012 and possibly it may be extended to 2013 and beyond.
Permalink Submitted by Bruce Steiner on Mon, 2012-12-31 00:50
The book came out before portability was enacted.
Permalink Submitted by robert Rothberg on Wed, 2013-01-09 16:12
I’m thinking up setting up a IRA trust with my grandchildren the beneficiaries. Is there any problem if I name my daughter, their mother, the trustee.Does the generation skipping taxxation rules come into play for this trust?Further does any one have a good source for geeting a sample trust that I can use to set up my trust?
Permalink Submitted by Bruce Steiner on Wed, 2013-01-09 20:26
It’s a generation-skipping transfer. If it’s more than the GST exemption (currently $5,250,000), you’ll pay GST tax.You can put the trust (or, more likely, trusts, one for each grandchild) in your Will, or in a separate trust instrument. The lawyer who handles your estate planning should be able to draft it. He/she has to make sure that none of the accumulated IRA distributions can ever go to any older than the person whose life you want to use for the stretch, or to anyone other than an individual (or another trust having the same restrictions). For more on this, see my article on trusts as beneficiaries of retirement benefits in the March 2004 issue of BNA Tax Management’s Estates, Gifts & Trusts Journal: http://www.kkwc.com/docs/AR20041209132954.pdf