Today is Earliest Date to File Portability Election via Estate Tax Return

9:10 pm Asset Protection, Estate Planning, Tax Planning

IRS Logo 150x150 Today is Earliest Date to File Portability Election via Estate Tax ReturnToday (October 3) is the first day that estate tax returns are due in order to claim the portability election if your spouse died during 2011.

Thanks to the new tax legislation passed last December, the new portability election allows estates of married couples to pass on the unused portion of their $5 million exclusion to a surviving spouse.  The new portability provision means that – at least for the next two years – spouses do not need to re-title property or create trusts just to take advantage of each other’s exclusion amount.

According to the IRS, the only way to make the portability election is to file an estate tax return on Form 706 – and the first estate tax returns eligible to make the portability election are due as early as today (estate tax returns are due nine months following the date of death).

The IRS allows estates to file for an automatic six-month extension via Form 4768.

Here are more details on what married couples need to know about portability:

  • Portability applies only to those who die after Dec. 31, 2010.
  • Portability applies to lifetime gifts as well as assets that pass through an estate plan.
  • Portability is not automatic; the executor must pass the unused exemption on to the surviving spouse.
  • If a surviving spouse remarries, he or she can only use the unused exemption of the new spouse.
  • Portability does not apply to the exemption from the generation-skipping transfer tax.
  • Couples with estates of less than $10 million can now leave everything to each other without a bypass trust – although if you want to shield assets from creditors or benefit children from a previous marriage, a bypass trust is still a good tool to use.

Do you have more questions about how you can benefit from the new tax laws?  Contact our California estate planning law firm.

Contact us today and let our Newport Beach law firm help you with all your financial planning needs.

Leave a Comment

Your comment

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.