Portability refers to allowing a surviving spouse to make use of his or her estate tax exemption on the federal level and the exemption granted to a spouse who is first to die.
Every decedent in 2017 is allowed a personal exemption of $5.49 million which allows a married couple to shelter up to $10.98 million from any tax liability on the federal level. This can often cause challenges however for a surviving spouse when the complete estate of the first to die spouse has been sheltered from the estate tax.
Even if no estate tax is due on the death of a spouse who passes away first, the executor of the estate needs to elect portability by filing an estate tax return within 9 months of death on form 706. Failing to make this selection could cause the estate of the second spouse to bear the entire tax burden in particular because the surviving spouse typically inherits the majority of the deceased spouse’s estate.
Consulting with a knowledgeable estate planning lawyer is one of the best ways to protect your interests as you look at the complex goals of estate planning. Talk to a Pasadena estate planning attorney to learn more.
