The federal estate tax exclusion has grown from $5,000,000 in 2011 to $5,340,000 in 2014. Beginning in 2011, if properly elected, the unused exclusion of one spouse’s estate could be used by the surviving spouse’s estate.
A portability election is an election under Internal Revenue Code Section 2010(c)(5)(A) to transfer a decedent’s unused exclusion amount (known as a deceased spousal unused exclusion (DSUE) amount) to the decedent’s surviving spouse. If a portability election is made, the surviving spouse will have his/her own exclusion amount ($5.34 million in 2014 less certain lifetime gifts) plus the DSUE amount. The surviving spouse can then use the DSUE amount, with some restrictions, with his/her remaining exclusion amount to make gifts during life and at death before being subject to federal gift and estate tax. This election is to be made on a timely filed federal estate tax return.
For more information on Estate Exclusion Portability, please click here.
