How does simplified trust planning through portability work?

The current federal portability provision has given rise to a more simplified approach to trust planning. The portability provision allows the first spouse to leave all of his or her assets to the surviving spouse.

Often, clients who implement this simplified approach work with a joint trust established by both spouses rather than two separate trusts. The advantage is that the entirety of the couple’s assets — those left by the deceased spouse and those of the surviving spouse — will receive a basis adjustment at the surviving spouse’s death.