Portability- The Best Kept Secre

Recently the IRS released statistics for federal estate tax returns (form 706s) filed in 2011, which was the first year of portability (the ability of the surviving spouse to add the deceased spouse’s estate tax exemption to the surviving spouse’s estate tax exemption by filing a timely form 706). There were 1,565 non-taxable form 706s filed for California decedents dying in 2011. It is likely that most of these non-taxable returns were filed by the surviving spouse to elect portability. Given California’s large population, this is a very low number. It is likely that many surviving spouses failed to file a timely form 706 for their deceased spouses because they did not understand that portability was available. Further, there is no guarantee that the current $5,430,000 exemption equivalent will not be lowered (President Obama has a proposal which would lower it to $3,500,000). Lets get the word out!

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