Article On Spousal Trust After ATRA

Martin A. Goldberg (Associate Professor, University of New Haven College of Business) recently published an article entitled, Article: Spousal Trusts After ATRA: Specialized Uses and Risks, 28 Quinnipiac Prob. L.J. 148-164 (2015). Provided below is an excerpt from the article:

The first round of the vast tax law changes, popularly known as the “Bush Tax Cuts,” were enacted back in 2001, in the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). EGTRRA contained a mixed message with regard to the federal estate tax: repeal of the estate tax in 2010 followed by a sunsetting of the entire law in the following year. This would have meant a return to a federal estate tax with a $ 1,000,000 estate tax exclusion under the unified credit. To many it looked like the end of the estate tax, and in turn, an end to estate tax planning. For those under that impression, this perception did not wane until 2011 approached and it appeared that the repeal would not be made permanent.

The transition from the temporary estate tax repeal to the current law, which has no expiration date, took part in two steps: first, through the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, and second, through the American Taxpayer Relief Act of 2012 (“ATRA”). The first of these introduced the idea of “portability,” that a surviving spouse could take advantage of the unified credit of the predeceased spouse, even without the traditional credit shelter trust.