Unlimited Marital Deduction
The unlimited marital deduction allows a spouse to leave an unlimited amount of assets to their surviving spouse without incurring any federal estate tax at the first spouse's death. This applies whether assets are transferred directly to the surviving spouse or to a qualifying trust for their benefit. The marital deduction essentially defers estate taxes until the death of the second spouse.
Portability of Estate Tax Exemption
The concept of portability allows a surviving spouse to use their deceased spouse's unused estate tax exemption amount (DSUEA). Key points about portability include:
- It allows the surviving spouse to add the deceased spouse's unused exemption to their own.
- To claim portability, an estate tax return (Form 706) must be filed within 9 months of the first spouse's death (with a possible 6-month extension).
- As of 2024, the individual lifetime estate tax exemption is $13.61 million.
- Portability effectively allows married couples to pass on up to $27.22 million tax-free to heirs in 2024.
