Estate Tax Portability

If a client dies with an estate valued under the current federal estate tax threshold ($5,490,000 for decedents who die in 2017), it may still be prudent to file a federal estate tax return in order to elect portability for the surviving spouse.

Portability allows the surviving spouse to benefit from the unused federal lifetime exclusion of the deceased spouse for gifts made by the surviving spouse and/or for the value of the estate, when the second spouse dies. To elect portability, the estate of the first spouse to die must file a federal estate tax return (Form 706) on or before the normal due date, including extension.  While portability can provide an important benefit to the surviving spouse for federal purposes, New York State does not permit portability for New York estate tax purposes.