Although there are still some situations where bypass trusts are relevant, from an estate planning perspective, changes made in the American Taxpayer Relief Act of 2012 -- namely, the portability of the estate tax exemption -- have made the use of these trusts adverse, writes Michael Kitces. Using bypass trusts can have negative tax consequences, he writes, not from an estate tax perspective but from an income tax perspective. Further, it's often unnecessary to utilize a bypass trust to protect property from federal estate taxes when a couple can simply file an estate tax return at the first death to preserve portability, Kitces points out.

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