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This describes a problem that is going to cause many families to pay millions of dollars in estate tax that they would not have had to pay if they had watched this video or otherwise educated themselves.

While the word portability may not mean much to you, portability first became a significant estate tax savings tool that became effective for married persons who died on or after January 1. 2011.

You see, back in the day, prior to portability, it was a real no-no for a married person to die and leave their entire estate to their surviving spouse. For example, if back in the day prior to 2011, the federal estate tax exemption that each spouse had was $1M, and a couple had a $4M estate ($2M each), if the first spouse to die left their estate outright to their surviving spouse, they would have mistakenly overused the federal estate tax marital deduction which would have resulted in no estate tax due upon the first spouse’s death, but it would have caused the surviving spouse to own the entire $4M, and when that surviving spouse died, the surviving spouse would only utilize the surviving spouse’s $1M estate tax exemption. The couple didn’t get to use the first spouse’s exemption because the first spouse lumped their entire estate into the estate of the surviving spouse. Now, back in the day, the adverse tax effect that results from lumping the estate of the first spouse to die into the surviving spouse’s estate was avoided by having the first spouse to die leave assets to a trust that would not be included in the estate of the surviving spouse.

0:00 Paying Unnecessary Estate Tax
0:19 Prior to Portablility
1:51 Portablility for Deaths After 2010
4:07 Using Portability
5:37 People Are Not Aware of Portability
6:47 Estates Have Five Years to Elect Portability (if they qualify)