Q: I heard that estate tax exemptions have portability. What does that mean?
A: Portability means that a surviving spouse can make use of any unused estate tax exemption, of the deceased spouse–thus increasing the amount of an estate that escapes the federal estate tax. However, the only way to use “portability” is to elect to do so when filing the deceased spouse’s estate return. Therefore, a tax filing should be done even for small estates that would not normally be required to file an estate return.
A: This allows the remaining spouse a larger protection against future increases in the value of the estate–better safe than sorry. Contact our office for helping filing the correct documents.