By Rafael A. Perez, Esq, Chief Compliance Officer


The IRS has provided regulatory relief in the estate tax arena for surviving spouses whose partner died after 2010.  While this relief applies to a very narrow set of persons, if it does apply you may substantially reduce future estate taxes thereby passing on more assets to your heirs.

You should take action if the following conditions apply to you:

  1. Your spouse passed away on or after January 1, 2011;
  2. Your spouse’s estate did not file an estate tax return; and
  3. Your estate can potentially be worth more than $5,500,000 at the time of your death (this figure was set by Congress at $5,000,000 in 2011 and indexed for inflation – it stands at $5,490,000 in 2017 and provides a good starting point for deciding whether to seek relief).

If these three conditions exist, please contact your tax professional immediately.

To obtain the regulatory relief, before January 2, 2018 your deceased spouse’s estate must file an estate tax return making a “portability election,” thereby allowing you to take advantage of what is referred to as the “Deceased Spousal Unused Exclusion Amount.”

In plain English, this means the amount you can pass on to your heirs free of federal estate tax will increase from approximately $5,500,000 to at least $10,500,000.00 (you should also consider any estate taxes imposed by your home state).  With federal estate tax rates in the 34% to 40% range, the savings are potentially in the millions.

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