Forbes, Married, With Assets, by Deborah L. Jacobs:

The new estate law allows couples to do without trusts–if they trust each other.

Under the new law, just as under the old one, you can leave a citizen spouse or a charity an unlimited amount, without worrying about tax. But the new law makes two key changes. First, it raises each individual’s lifetime exemption from federal estate and gift tax for transfers to nonspouse heirs to a hefty $5 million, from $3.5 million in 2009 and only $2 million in 2008. Second, it makes the exemption “portable” between spouses–meaning a surviving spouse can add any unused exemption of her just-deceased spouse to her own $5 million exemption. So a widow or widower can pass on as much as $10 million, untaxed, through either lifetime gifts or bequests.

Portability isn’t automatic. To get it, the executor of the estate of the first spouse to die must file an estate tax return, even if no tax is due. Surviving spouses should get this return filed even if they have nowhere near $5 million of their own, because someday, who knows? Portability also isn’t retroactive, so it’s no help to those who lost spouses before 2011. Finally, it doesn’t apply to the $5 million per person exemption from “generation-skipping” tax–the extra tax imposed on gifts to grandkids whose parents are still alive. That means the truly rich will want to use up their own $5 million exemptions, likely through gifts in the next two years.

The new estate law expires at the end of 2012. If Congress doesn’t act before then, not only will portability lapse but the exemption amount will revert to $1 million and the estate tax rate will increase to 55% from the current 35%. Rapidan, Va. estate expert Howard M. Zaritsky insists this makes it risky to rely on portability when redoing estate plans. Others strongly disagree. “Portability is here to stay,” Columbia Law professor Michael J. Graetz told estate-planning pros in January. Graetz, who wrote a book on the history of the estate tax, also predicts the $5 million tax-free amount won’t be reduced. …

Lawyers are now touting an idea they used to belittle: disclaimer trusts. You leave everything to your spouse outright, but give her the right to disclaim (turn down) all or part of the inheritance and have it go into a bypass trust, allowing her to make an informed decision based on her finances and the latest federal and state estate tax laws. …

So what have attorneys had against disclaimer trusts? Disclaimers can be tricky; you can’t, for example, disclaim assets you’ve already touched. But mostly, some lawyers haven’t trusted surviving spouses to disclaim assets when they should. Now the new game in estate planning is an old-fashioned form of trust–between spouses.