Strategic Estate Planning and Compliance with Portability Elections in 2014

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The portability of the deceased spousal unused exclusion amount (DSUE amount) is the most significant change in estate tax law in over 30 years. This course reviews how to make portability elections on Form 706 and provides practitioners strategic decision making skills for determining the extent to which the DSUE amount will be implemented. The federal estate tax return offers a significant opportunity to reduce income tax and/or estate tax after the death of the first spouse. The portability election embraces both estate planning goal-setting and compliance requirements. This course will help you identify important planning variables with portability elections while learning how to complete Form 706 to make this election, identify significant issues, discuss practical problems, and receive compliance tips for a more effective practice.

A timely filed estate tax return offers the only way to take advantage of the portability election. An estate tax return may be necessary, even in modest-sized estates, if the surviving spouse wants basis increase on property left in trust by the deceased spouse. The IRS has established workable rules to ease the portability election and make it less expensive for your clients. On the other hand, simplified reporting may be of little utility for many estates that want to make portability elections. During this presentation, Keith Schiller will:
• Review variables in the decision-making process on whether to maximize use of the exemption trust or seek the greatest possible DSUE amount 
• Discuss why estate tax returns have become so important as an estate planning tool for clients —even of moderate wealth for whom estate tax will never become relevant
• Review the fundamentals of portability elections
• Explain the new rules for simplified reporting for portability purposes 
• Identify the impact on the DSUE amount arising from adjusted taxable gifts, debts, and administrative expenses, unresolved claims against the estate and GST planning 

This program considers how asset mix, prospects for appreciation in the value of the estate, depreciation, and provisions in estate planning documents impact the extent to which the DSUE election may be most effectively made. 

From a compliance standpoint, this program will review three sample estate tax returns: (1) 100% outright to the surviving spouse or in a QTIP trust; (2) QTIP trust for the surviving spouse with some outright distribution to the surviving spouse; and, (3) credit shelter trust with DSUE amount remaining. 

During this course, you will be provided with a conceptual understanding and practical application of the following:
• How to determine whether estate tax or income tax will become the more likely tax of concern when the surviving spouse dies
• Complete Form 706 for the portability election of the DSUE amount
• Basics on how portability works, qualification, terms, and usage
• Who controls the portability election and the potential to “hijack” the basic exclusion of the deceased spouse
• How to report the use of the DSUE amount on the Form 706 when the surviving spouse dies
• When the simplified reporting rules apply for portability elections and when they are of limited benefit
• “QTIP-ing” the credit shelter trust
• Special-problems discussion: establishing basis with simplified reporting, working with appraisers, treatment of debt and how to handle unresolved claims against the estate
• Identify issues arising from QDOT trusts for the non-citizen spouse
• Reporting with reverse QTIP elections to preserve GST exemption with portability-elected returns

Educational Objectives
• Define the portability election
• Identify the benefit of QTIPS trusts
• Identify which estates are required to file a Form 706 estate tax return
• Calculate the deceased spousal unused exclusion amount (DSUE)
• Determine who is eligible to file under simplified portability reporting, and what the requirements are for such reporting
• Pinpoint the purpose and use of different sections of Form 706
• Determine the implications of Rev. Proc. 2001-38 and the 2012 Tax Act
• Review concepts associated with real property transactions
• Recognize major planning issues for married couples



Keith Schiller, Esq., is founder of the Schiller Law Group, a PLC, of Orinda, California. Keith works with clients and consults with estate planning, trust administration, and tax practitioners, including reviewing estate, gift, and GST tax returns for practitioners.

Keith is a member of the Advisory Board for BNA’s Estates, Gifts and Trusts journal and the Consulting Board for the Leimberg Information Services®, Inc. Newsletter. He has taught 11 courses for the CalCPA Education Foundation, authoring greater than three dozen published articles and 10 course texts for continuing professional education.

Keith is the author of the award-winning book, Estate Planning At The Movies® — Art of the Estate Tax Return, which you have the opportunity to purchase as reference materials for today’s webinar. Details on ordering will be provided at the start of the presentation. The book reveals Keith’s best practice pointers, his insights from co-teaching with the IRS, and practical recommendations from over a dozen leading practitioners across the country. Art of the Estate Tax Return garnered the 2010-2011 Award for Outstanding Course Materials by the CalCPA Education Foundation.

From passion, Keith chaired the Yosemite License Plate Campaign, during which he lobbied passage for the law approving the Yosemite License Plate and directed the state-wide marketing and sales campaign. The Yosemite License Plate has raised in excess of $25 million for the preservation of Yosemite and California conservation.