What are the benefits associated with portability? (A) Preserves step up in basi

Question

What are the benefits associated with portability?

          (A)    Preserves step up in basis on survivor’s death.

          (B)    Better accommodates large qualified plans than credit shelter trusts.

           (C)    Surviving spouse can use the deceased spouse’s unused exclusion amount without having

                   to create complex trusts or use other tax-saving techniques.

           (D)    All of the above.

Can you provide a detailed explanation for your answer? Please only answer if you have a strong background in estate planning.

Explanation / Answer

A. Portability has a number of noticeable benefits in passing assets outright, as it preserves the step-up in basis upon the surviving spouse's death, it negates the need to re-title assets among various trusts and there's no requirement to file annual income tax returns. B. Portability also possesses a cost-effective simplicity that makes it appealing to clients, and it can better accommodate large qualified plans than can credit shelter trusts. C. The surviving spouse may use the unused exclusion amount of a deceased spouse only if the executor of the deceased spouse timely files a Form 706 for the deceased spouse and elects to make that spouse's unused exclusion portable. Answer D:

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