![](\"https:\/\/s3.amazonaws.com\/snd-store\/a\/90147910\/08_31_23_1351058840_epb_560x292.jpg\")
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Portability helps minimize federal gift and estate tax by allowing a surviving spouse to use a deceased spouse\u2019s unused gift and estate tax exemption amount. Currently, the exemption is $12.92 million, but it\u2019s scheduled to return to an inflation-adjusted $5\u00a0million on January 1, 2026.<\/p>\n
Unfortunately, portability isn\u2019t automatically available; it requires the deceased spouse\u2019s executor to make a portability election on a timely filed estate tax return (Form 706). And many executors fail to make the election because the estate isn\u2019t liable for estate tax and, therefore, isn\u2019t required to file a return.<\/p>\n
The numbers don\u2019t lie<\/strong><\/p>\n When there\u2019s a surviving spouse, estates that aren\u2019t required to file an estate tax return should consider filing one for the sole purpose of electing portability. The benefits can be significant, as the following example illustrates:<\/p>\n Bob and Carol are married. Bob dies in 2023, with an estate valued at $3.92 million, so his unused exemption is $9 million. His estate doesn\u2019t owe estate tax, so it doesn\u2019t file an estate tax return.<\/p>\n Carol dies in 2026, with an estate valued at $15 million. For this example, let\u2019s say the exemption amount in 2026 is $6 million. Because the exemption has dropped to $6\u00a0million, her federal estate tax liability is $3.6 million [40% x ($15\u00a0million \u2013 $6\u00a0million)].<\/p>\n Had Bob\u2019s estate elected portability, Carol could have added his $9 million unused exemption to her own for a total exemption of $15 million, reducing the estate tax liability on her estate to zero. Note that, by electing portability, Bob\u2019s estate would have locked in the unused exemption amount in the year of his death, which wouldn\u2019t be affected by the reduction in the exemption amount in 2026.<\/p>\n Take action before time expires<\/strong><\/p>\n If your spouse died within the last several years and you anticipate that your estate will owe estate tax, consider having your spouse\u2019s estate file an estate tax return to elect portability. Ordinarily, an estate tax return is due within nine months after death (15 months with an extension), but a return solely for purposes of making a portability election can usually be filed up to five years after death. Contact us with any questions regarding portability.<\/p>\n \u00a9 2023<\/em><\/p>\n <\/body> Portability helps minimize federal gift and estate tax by allowing a surviving spouse to use a deceased spouse\u2019s unused gift and estate tax exemption amount. Currently, the exemption is $12.92 million, but it\u2019s scheduled to return to an inflation-adjusted $5\u00a0million on January 1, 2026. Unfortunately, portability isn\u2019t automatically available; it requires the deceased spouse\u2019s executor […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,9,10],"tags":[8,11,12],"class_list":["post-16713","post","type-post","status-publish","format-standard","hentry","category-articles","category-estates","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16713"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16713\/revisions"}],"predecessor-version":[{"id":16714,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16713\/revisions\/16714"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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