In a nutshell, portability allows a surviving spouse to use part or all of the deceased spouse’s estate tax exemption in addition to his or her own. While Georgia does not have an inheritance tax – the federal estate tax does apply to Georgia residents. Portability allows a surviving spouse to utilize the deceased spouse’s unused exemption if the value of the estate is higher than the federal exemption which can save you taxes on your estate.
Who Can Use Portability?
While many people don’t have to worry about electing portability currently because their estate is valued at less than the exemption, which is currently $12,920,000 for 2023, the current law sunsets on 12/31/2025 and the exemption will drop to approximately $6 Million. For married couples where their estates exceed $6 Million and the first spouse did not use all of the exemption, use of portability can allow the survivor to utilize the deceased spouse’s exemption to pass more assets free of estate tax.
The process does have some exemptions:
- If the executor of the estate did not file an estate tax return and / or did not elect for the spouse to use portability, you wouldn’t be able to take advantage of it.
- You can only use your last spouse’s unused exemption. If you were married three times, you could not elect portability on your first two spouses’ estates and receive the unused exemptions from 3 spouses.
- The election must be filed within 9 months of the death.
How to Elect Portability?
The decedent’s estate must file a tax return and elect the portability option on the tax return which requires the executor to prepare or have a estate tax return prepared and filed within nine (9) months of the death. This may require appraisals of real property and other assets. For this reason, the executor will need to estimate the value of the estate at your death to determine if taking that extra step of filing an estate tax return for your spouse is worth the extra money.
Contact Grissom Law, LLC, at (678)781-9230 for a consultation if you have questions regarding portability or if your spouse recently passed. You have nine months to file an estate tax return for your spouse’s estate.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.