Can a Married Couple wait until after one Spouse dies to worry about Estate Taxes?

August 8, 2017

  No, if a couple waits until after the first spouse's death, the first spouse's unified credit will not be available to shelter that amount when the surviving spouse dies. Failure to take full advantage of one's Life Time Estate Tax Exemption while both spouses are living will result in the loss of half of the combined Life Time Estate Tax Exemption when the surviving spouse dies. An effective way to reduce estate taxes is to take advantage of the unified credit allowed by the IRS which allows every individual to distribute free of estate taxes an amount equal to the individual's Life Time Estate Tax Exemption. By combining the Unlimited Marital Deduction and creating a present and remainder trust interest, a married couple may each use the trust process to shelter assets. 

  For example in 2009 that was $3,500,000.00 each person (a combined amount of $7,000,000.00). On a couple's combined estate of $7,000,000.00, a failure to shelter the couple's combined estate passing to the surviving spouse while both are living will result in an unneeded estate tax payment of forty-five (45%) percent on the $3,500,000.00 over the individual's exemption, or $1,575,000.00 unnecessarily paid to the govenment and lost to your heirs or designated beneficiaries.


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