The portability of the estate tax was kept in place after the passage of the piece of legislation that is now being called the American Taxpayer Relief Act of 2012.
Each taxpayer has an individual estate tax exclusion, and this year the amount of the exclusion is $5.25 million. So, a husband and wife would have $10.5 million in total.
Before 2011 your estate tax exclusion died when you did. A surviving spouse could not use the exclusion that his or her deceased spouse was entitled to, and many people did not see the fairness in this lack of portability.
Beginning in 2011 the estate tax was made portable, and you can still use your deceased spouse’s exclusion as well as your own.
There is however something very important to understand about the portability of the federal estate tax exclusion. The executor of the estate of someone who passes away must file Internal Revenue Service Form 706 within nine months of the decedent’s passing to take advantage of the portability option.
If for some reason you were to need a bit of extra time the IRS allows for a six-month extension to this nine-month deadline.
Clearly, the wise course of action would be to sit down and discuss everything with your estate planning attorney after your spouse passes away.
Small but important details such as this one could be overlooked by the typical layperson, but an experienced legal professional is going to know exactly how to proceed at all times even as laws continually change over the years.