Californians’ Tax Shelter May Double

The online Wall Street Journal said in an article posted on October 15th that estates, including those in California that may or may not go through probate, may benefit by a “portable” estate tax shelter regardless of which presidential candidate is elected.

The article says: “This issue is known as portability because the exemption per person — $2 million this year and $3.5 million next year — would become transferable from one spouse to the other, in effect doubling the surviving spouse’s exemption. In essence, that means that spouses would be able to use each other’s estate-tax exemption without first having to set up complex and costly trusts and take other steps that many people now feel obliged to do.”

For us in California, the article goes on to say: “…such a change could greatly simplify estate planning and lead to fewer hassles for many married couples and their heirs.” Living trusts in California may no longer be necessary to capture both spouses federal tax shelter. Nonetheless, a living trust will continue to be useful as a technique to avoid probate.

Probate in California continues to be a good reason to create a living trust. If someone you know died and did not have a living trust, call Mitchell A. Port to discuss probate.