New Considerations in Planning and the Stepped-Up Basis in Virginia

PortabilityPlanning for married couples should include an evaluation of whether a portability-based plan or credit shelter based plan makes the most sense in the context of the couple’s financial and personal situation.

New circumstances give rise to new abilities for estate planners. This, in turn, is creating some new and difficult choices. With the new ability to minimize estate taxation, known as “portability,” there is now a choice between the automatic portability plan and the old standby of the trust-based plan, notably the credit shelter trust plan.

One important detail driving the choice is the “step up in basis,” as pointed out in a recent Forbes article titled “Portability Plans Vs Credit Shelter Plans Round 1: Step Up in Basis.

As you may know, the laws surrounding estate and wealth transfer planning underwent a tumultuous change with ATRA. Time was, we spent our planning sessions looking over our shoulder to see what the status of the estate tax was, but that is a gentler beast these days. Nevertheless, there are new competing concerns for which to plan. The old planning techniques aren’t necessarily less useful today, but our motivations may have changed.

To learn more about the old tricks, there are a few related Forbes articles worth perusing: “Planning for Married Couples After ATRA: The Simple Portability Based Plan” and Part 2 thereto.  So what’s the lesson on the step up in basis?

A “step up in basis” is a somewhat subtle effect, but one that’s not to be overlooked. After all, the basis of an asset will determine the taxable value to your heirs, so to have the basis stepped up at various stages can only help cut the overall tax bill. Consequently, any plan that lets you do this can be useful.

It’s not quite so simple but, depending upon the assets, simply using the “portability plan” can help realize the greatest tax savings and the original article runs through the scenarios to show you some hard math on how it works.

Whether you have an old plan in place or if you’re just now looking to set up your estate plan, there are simply more considerations to be made these days and assessments like cost basis can make all the difference. It’s important to seek competent estate planning legal counsel to help chart the best course for your assets and the needs of your family.

You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.


Forbes (April 8, 2014) “Portability Plans Vs Credit Shelter Plans Round 1: Step Up in Basis

            Forbes (March 18, 2014) “Planning for Married Couples After ATRA — Part I

            Forbes (March 25, 2014) “Planning for Married Couples After ATRA — Part 2


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We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.