Portability allows married couples to easily double the amount of their estate that escapes federal estate tax. Assume for example that Steve and Carrie are married, own everything jointly, and have a combined estate of $2,000,000. If Steve were to pass away first, using the unlimited marital deduction, he can transfer everything to Carrie and no estate tax is due upon his passing. However, when Carrie passes away, her entire estate is now $2,000,000. With only a $1,000,000 exemption in Minnesota, under current rates, Carrie’s estate would pay approximately $99,600 in Minnesota estate tax. If Minnesota had portability, Carrie could have used Steve’s $1 million exemption, in addition to hers, and no estate tax would have been due. The bad news is that Minnesota does not have portability. The good news is that with advance planning, Steve and Carrie can still avoid the Minnesota estate tax and pass an additional $99,600 to their heirs.

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Chuck Roulet
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Nationally Recognized Estate Planning Attorney, Author, and Speaker