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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.
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SAND, PEARLS, AND STRENGTH OF CHARACTER
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
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