Page 1: What Is the Estate Tax and Why Does It Matter?
When someone passes away, the government may collect a tax on the money and property they leave behind. This is called the estate tax. But not everyone has to pay this tax. There’s something called the estate tax exemption, which lets a person pass on a certain amount of money and property without paying estate tax.
As of 2025, the estate tax exemption is very high — around $12.92 million per person (based on 2023 numbers; it may change). That means if someone’s estate is worth less than that, no estate tax is owed.
But what happens when a married person dies and doesn’t use all of their exemption? That’s where the portability of the estate tax exemption between spouses comes in.
Page 2: What Is Portability and How Does It Help Married Couples?
The portability of the estate tax exemption between spouses means that when one spouse dies, the other can use their unused exemption amount. This helps a surviving spouse protect more of their estate from taxes when they pass away later.
Let’s say Jane and John are married. John dies first. He only used $2 million of his estate tax exemption. If Jane files the right paperwork, she can add John’s unused $10.92 million exemption to her own. Now Jane can pass on up to $23.84 million (if the exemption amount stays the same) without paying estate tax.
To make this work, the surviving spouse must file a special form with the IRS, called Form 706. This form must be filed within nine months of the first spouse’s death. Sometimes, the IRS allows an extra six months if needed.
So, the portability of the estate tax exemption between spouses can make a big difference. It lets families keep more of what they’ve worked hard for, especially if they plan carefully and act on time.
Page 3: Important Rules and Tips to Use Portability in 2025
To take full advantage of the portability of the estate tax exemption between spouses, it’s important to understand the rules:
- File Form 706 on Time
Even if you don’t owe estate tax when the first spouse dies, you still need to file this form. It tells the IRS you want to keep the unused exemption for the surviving spouse. - Know the Limits May Change
In 2025, current laws may change. The large exemption amounts from recent years could be cut in half starting in 2026 if Congress doesn’t act. That’s why the portability of the estate tax exemption between spouses is more important than ever — it can double the amount a couple can pass on tax-free. - Work with a Tax Professional
This area of law is complicated. A tax expert or estate planner can help make sure everything is done right. They can make sure deadlines are met and all paperwork is complete. - Keep Good Records
Keeping track of how much of the exemption was used is important. This will help when it’s time for the second spouse’s estate to be processed.
In summary, the portability of the estate tax exemption between spouses gives families a powerful tool to save on estate taxes. By understanding the rules and planning ahead, couples can make sure more of their estate goes to loved ones — not the IRS.
