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It is Not Too Late to Elect Portability of a Deceased Spouse’s Unused Estate Tax Exemptions by Kathleen Marteney, CRPC

Posted on October 12, 2017

Surviving spouses now have more time to transfer to themselves the unused estate and gift tax exclusion of a deceased husband or wife. Under new guidance issued by the IRS, qualifying widows and widowers have two years from the date a spouse passed away to make a portability election and potentially double the amount of assets that they can shield from federal estate taxes during life or at death.

 

Previously, the law required estates to make portability elections within just 15 months of the first spouse’s death. Unfortunately, it was common for surviving spouses to miss the deadline or forgot to elect portability entirely, especially when a final estate tax filing was not required. In these situations, the estate had the option to request a letter ruling from the IRS and pay fees as high as $10,000.

 

Under the new regulations, widows and widowers now have the ability to maximize their estate tax savings and make a late portability election when their spouses passed away between January 1, 2011, and January 2, 2016, and their spouses’ estates were not previously required to file an estate tax return.  The election must be made before January 2, 2018, or on the second anniversary of the decedent’s date of death, whichever date is later.  Doing so requires a timely filing of IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, even in instances in which the estate’s value is so small that a filing would not otherwise be required.

 

In 2017, the federal estate tax exclusion is $5.59 million for individuals or twice as much for married couples. Any assets over this amount are subject to taxation at a rate as high as 39.6 percent. By taking advantage of the new guidance and making a late portability election before the January 2018 deadline, surviving spouses can avail themselves to new estate planning opportunities that can potentially save themselves and their heirs hundreds of thousands of dollars in taxes.

 

About the Author: Kathleen Marteney, CRPC, is a financial planner with Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services. She can be reached at (800) 737-8804 or via email at info@provwealth.com.

 

Provenance Wealth Advisors, 200 S. Biscayne Blvd., Miami FL  33131 (954)712-8888

Kathleen Marteney, CRPC, is a registered representative of and offers securities through Raymond James Financial Services, Inc., Members FINRA/SIPC.

 

Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.  

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. 

The information contained in this report has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Neither Raymond James nor any Raymond James Financial Advisors renders advice on tax or legal issues. These matters should be discussed with the appropriate professional.

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