Ten Possibilities of Portability

In general, portability allows a surviving spouse whose husband or wife died after Jan. 1, 2011 to use the deceased spouse’s unused federal estate tax exemption (DSUE). When one owns assets less than his lifetime exclusion amount and passes away first, portability has the potential to correct issues associated with unbalanced asset ownership between spouses and inefficient estate documents that leave all assets to the surviving spouse.  

Portability was first introduced as part of Tax Relief Unemployment Reauthorization and the Job Creation Act of 2010. It was scheduled to sunset on Dec. 31, 2012 but was made permanent with passage of the American Taxpayer Relief Act of 2012.

Here are 10 pointers on using DSUEs.