Portability Exemption

Just when is the DSUE [Deceased Spouse Unused Exemption] available to a surviving spouse or the estate of a surviving spouse for use in determining the surviving spouse’s applicableexclusion amount?

It can be very challenging to stay on top of federal estate tax law changes. For instance, experts

and taxpayers alike are grappling with the ins and outs of “portability.” How and when can it be

used? The temporary regulations governing portability are now on the books. While there is some

guidance regarding how a “Deceased Spouse Unused Exemption” (DSUE) actually works, a

recent Forbes article, titled “Estate Tax Portability - Date DSUE Amount May Be Taken Into

Account,” provides some practical advice.

As many know, “portability” refers to the new ability of a deceased spouse to pass along their

unused unified exemption amount (the amount in a lifetime that you can either transfer without

gift tax or can pass through your estate without estate tax) to their surviving spouse without

implementing traditional estate tax planning techniques.

The question many surviving spouses might face is when to make use of the exemption. What if

they have a gifting strategy, especially if there is little time to spare? Does the DSUE pass

immediately or does the estate tax return have to be filed?

As a rule of thumb, the DSUE passes immediately. In turn, this can buy some time given how

long it could take to file an estate tax return. As with all tax matters, be sure to consult with your

professional advisors before making a move you cannot undo later.

Reference: Forbes (January 14, 2014) “Estate Tax Portability - Date DSUE Amount May Be

Taken Into Account”

Jimmy Long