Published on June 18, 2011
In order to elect portability, a federal estate tax return (Form 706) must be timely filed. Portability allows a decedent’s unused federal exemption to be transferred to the surviving spouse’s exemption, allowing the surviving spouse to use his or her own exemption, plus the unused amount, when he or she later dies. Based upon the changes in the estate tax laws at the end of this year, portability may be an effective estate planning tool for a surviving spouse. Please note that the Form 706 must be timely filed, though recent regulations have provided for an automatic extension when the decedent passed away in the first six months of the year. If you’ve lost your spouse recently, be sure to talk to your professional advisor about the portability election.