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Estate Planning Exemption Considerations for U.S. Citizen Spouses

The Spousal Exemption is a tax exemption applicable to Estate Taxes that allow for a beneficiary spouse to receive the estate of a decedent spouse tax free regardless of the value of the estate. This exemption applies only to legally married people and the beneficiary spouse must be a citizen of the United States.

In early 2013, President Barack Obama and Congress signed into law the "American taxpayer Relief Act" (“ATRA”). As far as the Federal Estate Tax is concerned, this Act changed the Federal Estate Tax exclusion to approximately $5,250,000, with inflation, with a top tax rate of 40% for estates exceeding $5,250,000 in 2013 and future years going forward. ATRA in conjunction with the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act” (“TRUIRJCA”) also allowed for spousal portability, meaning that if a decedent spouse leaves their estate to the beneficiary spouse, the beneficiary spouse will receive the Spousal Exemption. However, portability also allows for the decedent spouse to pass their estate with their $5,250,000 exclusion. Therefore, the surviving spouse has a potential $10,500,000 exclusion they can use to pass to their heirs and beneficiaries.

For a free estate consultation, contact McClanahan Powers by e-mail or phone at 703-546-8594. All calls and e-mails are returned within 24 business hours.

Estate Planning Exemption Considerations for Non-U.S. Citizen Spouses

The Spousal Exemption does not apply to beneficiary spouses who are not United States Citizens even if the beneficiary spouse is a permanent U.S. resident. If a Non-U.S. Citizen Spouse is named as the beneficiary of the decedent spouse they will be subject to the estate tax exclusion amount the same way that a non-spouse beneficiary would be.

For more information regarding taxes that effect estates, please see Virginia Estate Planning Tax Considerations, Virginia Federal Estate Tax, Virginia Gift Tax, Virginia Estate Income Tax, and Virginia Inheritance Tax.

Free Estate Spousal Exemption Consultation

To receive a free estate spousal exemption consultation, please call McClanahan Powers at 703-546-8594. Or, to send an e-mail, please complete and submit the online form on this website. Flexible appointment times and payment options are available.