When someone you love passes away, it’s a very hard time. On top of your loss, you may also need to think about money and planning. One big part of this is called estate planning after death of a spouse. In 2025, the rules are still a bit complex, but one important idea can help: portability. This article will explain what portability is and how it works.
Page 1: What is Estate Planning After Death of a Spouse?
Estate planning means making a plan for what happens to a person’s money, house, and things when they pass away. Estate planning after death of a spouse is when a surviving husband or wife needs to handle these things. It helps make sure that the money and belongings go to the right people.
When a spouse dies, the one left behind has to manage the estate. That means taking care of the will (if there is one), paying any taxes, and giving out the assets. This can be stressful, but there are some tools that make it easier. One of the most helpful tools is portability.
Portability is a rule that lets the living spouse use some of the estate tax exemption that their partner didn’t use. This means they can pass more money to their kids or loved ones without paying estate tax.
Page 2: How Does Portability Work?
In 2025, each person has a federal estate tax exemption of about $13.61 million. This means they can pass on up to that amount without paying estate taxes. If someone dies and doesn’t use all of their exemption, the spouse can use the rest. This is how portability works.
Here’s an example:
- Sam dies in 2025 and only uses $3 million of his $13.61 million exemption.
- His wife, Lisa, files a special form with the IRS.
- Lisa can now add Sam’s unused $10.61 million to her own exemption.
- That gives her a total exemption of $24.22 million.
This can help Lisa pass more money to her children without estate taxes when she dies.
But to make portability work, Lisa has to do something very important: she must file IRS Form 706 within 5 years of Sam’s death. If she forgets or waits too long, she can lose the portability benefit. That’s why good estate planning after death of a spouse is so important.
Page 3: Tips for Using Portability in 2025
Here are some simple but important tips to make sure you use portability the right way:
- Talk to an Estate Planning Attorney – A lawyer can help you file the right forms and meet the deadlines. They know the latest tax rules for 2025.
- Keep Good Records – Save your spouse’s will, tax papers, and anything about their estate.
- File Form 706 – Even if the estate is small, file this form to lock in the unused exemption.
- Review Your Own Estate Plan – After your spouse passes, your own estate plan may need changes.
Remember, the laws can change, but in 2025, portability is still a smart tool. It helps families protect more of their money and avoid large estate taxes.
So if you are facing estate planning after death of a spouse, know that you are not alone. And know that by learning how portability works, you can make a smart plan for your family’s future.
Summary
- Estate planning means deciding what happens to your money and things when you die.
- After a spouse dies, the survivor must manage the estate.
- Portability lets a spouse use the leftover estate tax exemption.
- In 2025, you must file IRS Form 706 to use portability.
- Good planning helps your family keep more of what you worked for.
Estate planning after death of a spouse is not easy, but understanding how portability works can give you peace of mind in 2025.
