Estate Ideas

March 2012


The Marital Deduction:
A Powerful Estate Planning Tool Available to Married Couples

The marital deduction (I.R.C. Sections 2056 and 2523) eliminates both the federal estate and gift tax on transfers of property between a husband and wife, in effect treating them as one economic unit. The amount of property that can be transferred between them is unlimited, meaning that a spouse can transfer all of his or her property to the other spouse, during lifetime or at death, and completely escape any federal estate or gift tax on this first transfer. However, property transferred in excess of the unified credit equivalent will ultimately be subject to estate tax in the estate of the surviving spouse.

Through use of the unlimited marital deduction, a married couple's combined assets are untouched by federal estate tax, meaning that the full amount is available for the surviving spouse's support and maintenance after the first spouse's death. At the surviving spouse's death, the marital deduction may not be available, meaning that the full value of the surviving spouse's remaining estate will be exposed to federal estate taxation.

The 2010 Tax Relief Act, however, provides for "portability" of the maximum estate tax unified credit between spouses. This means that a surviving spouse can elect to take advantage of any unused portion of the estate tax unified credit of a spouse who dies in 2011 or 2012 (the equivalent of $5 million in 2011). As a result, with this election and careful estate planning, married couples can effectively shield up to $10 million from the federal estate and gift tax without use of marital deduction planning techniques, but only if one of the spouses dies in 2011 or 2012. Property transferred in excess of the combined $10 million unified credit equivalent will be subject to estate tax in the estate of the surviving spouse.

If the surviving spouse is predeceased by more than one spouse, the additional exclusion amount available for use by the surviving spouse is equal to the lesser of $5 million or the unused exclusion of the last deceased spouse.

IMPORTANT NOTE: Since the 2010 Tax Relief Act "sunsets" at the end of 2012, "portability" of the unified credit exemption between spouses will not be available beginning in 2013 unless Congress takes action in the future.

If you'd like more information on how to make best use of the marital deduction, please contact my office.

from the Masters...


by Bob Burg

Besides making life a lot less stressful and a lot more fun, mastering the art of positive persuasion is, in and of itself, one of the best methods for developing our character. Why is that?

Because, prior to using just the right words and phraseology to gently take a person from a negative direction, to another that will benefit us both, we must take first things first. In other words, before we can successfully take a potentially difficult situation (usually in the form of a difficult person) and turn that into a mutually beneficial result, we must first become proficient at dealing with ourselves.

As we all know, nobody can make us angry without our permission, but it's difficult sometimes to not give them permission, isn't it? The good news is that every time we improve in this area, even just a little bit, we can take pleasure in having greatly improved our strength of character.

In his book, "Guard Your Anger," Rabbi Moshe Goldberger says, "God created oysters with the capacity to transform an irritating piece of sand into a pearl. This serves as a model for us - every trial contains precious jewels which we can find and develop." One of those trials certainly is dealing with a person who is either intentionally or unintentionally being difficult or irritating.

Philosopher/statesman, Edmund Burke, pointed out that "He who wrestles with us strengthens our nerves and sharpens our skills. Our antagonist is our helper." Yes, he or she is, but in order to appreciate that person instead of resenting them, we must continually keep that statement in mind.

And, in his 1909 classic, "Peace, Power and Plenty," Orison Swett Marden, wrote: "Self-Control is the very essence of character. To be able to look a man straight in the eye, calmly and deliberately, without the slightest ruffle of temper under extreme provocation, gives a sense of power which nothing else can give. To feel that you are always, not sometimes, master of yourself, gives a dignity and strength to character, buttresses it, supports it on every side, as nothing else can. This is the culmination of thought mastery."

Remembering any of the above quotes and philosophies at a time when someone does something irritating takes forethought, rehearsal and self-discipline. It is not necessarily an easy task. Then again, it isn't supposed to be. As the grain of sand was described as "irritating" before being turned into the pearl, so is that person irritating before you turn them into friend. Just think; all that time, without even knowing it, he or she was helping you to grow.

Bob Burg

Brought to you by:

Jeffrey N. Schweitzer, EPA, CEP, ATP

Northeast Financial Strategies Inc

667 South Street
Wrentham, MA 02093

About our firm:

Offering Financial & Estate Planning, Investments, Insurance, Accounting, Payroll, and Income Tax Preparation for Individuals & Small Business. "Financial Strategies That Fit YOUR Needs!"

from the Masters...

On Kindness

"Three things in human life are important. The first is to be kind. The second is to be kind. And the third is to be kind."

-- Henry James

"You have it easily in your power to increase the sum total of this world's happiness now. How? By giving a few words of sincere appreciation to someone who is lonely or discouraged. Perhaps you will forget tomorrow the kind words you say today, but the recipient may cherish them over a lifetime."

-- Dale Carnegie

"You will regret many things in life but you will never regret being too kind or too fair."

-– Brian Tracy

On Dreaming Big Dreams

"Hold on to your dreams for they are, in a sense, the stuff of which reality is made. It is through our dreams that we maintain the possibility of a better, more meaningful life."

-- Leo Buscaglia

"Dream big dreams! Only big dreams have the power to move your mind and spirit."

-– Brian Tracy

"To realize a dream, you must have a dream to realize."

-– Mark Victor Hansen

The purpose of this newsletter is to provide information of general interest to our clients, potential clients and other professionals. The information provided is general in nature and should not be considered complete information on any product or concept described.

For more complete information, please contact my office at the phone number above.

Published by The Virtual Assistant; 2012 VSA, LP

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