Are AB trusts still necessary?

I wrote a post last year explaining AB trusts. Since then Congress changed the law to make the estate tax exemption portable. That means that the first spouse to die didn't lost his or her exemption. If the deceased spouse didn't use it, the surviving spouse inherited it. Since AB trust language is primarily used for preserving the exemption, AB trusts are no longer necessary, correct?

No, of course not. Remember, AB trusts are just revocable trusts with AB trust language. You still need a revocable trust for a whole host of reasons. As for AB trust language, thanks to the portability of the estate tax exemption, AB trusts may be obsolete for the moment. But recall, the current law was really a temporary bandaid until more long term reform can be made. Thanks to Congress's inaction, 2010 passed without an estate tax and 2011 wasn't addressed until the 11th hour. This new law is only in place until the end of 2012, when the old laws are back in place, including a $1M estate tax exemption. Going by Congress past (and repeated) failures to act quickly, I won't hold my breath for their next move on estate taxes.

Also, while it's true that AB trust language restricts the surviving spouse's right to the corpus of the B trust assets, the surviving spouse gets around that by appointing a co-trustee to make distributions. Therefore, as a result of the uncertainty surrounding the future of the estate tax, I still use AB trust language in my revocable trusts.