The problem in the past was that if the planner did not use the abatement and left his entire estate to his spouse, then the ability to shift that amount of wealth to the next generation free of estate duty was lost. This resulted in planners using the abatement to the detriment of the surviving spouse - she could potentially be left with less than she needed to live off, while the children inherited the full R3.5 million.
The introduction of the portable abatement, as from 1 January, 2010, has removed the need for the first dying spouse to use the abatement, or otherwise lose it. The portability of the abatement allows so much of the abatement that is not used by the first dying spouse to be carried forward and used in the estate of the second dying spouse. This results in more flexibility when it comes to financial planning. In cases of high-nett-worth individuals, the planner may still wish to use the R3.5 million abatement to shift the wealth immediately, in order for the growth to happen in the hands of the beneficiary (life cover can be used to provide the R3.5 million). In smaller estates, it makes far more sense for the spouse to inherit everything, free of estate duty due to section 4(q) of the Estate Duty Act, and only on her death, for the beneficiaries to then inherit, with the first R7 million free from estate duty.
