In her recent Wall Street Journal article titled IRS Clarifies Estate Rules, Laura Saunders refers to new rules which make clearer the procedure involved for a surviving spouse seeking to take advantage of the $5 million per individual and $10 million per married couple exemption from estate taxes.
Ms. Saunders cites the example of a Wife who died in 2011 with assets totaling $1.5 million. $3.5 million of her exemption went unused.
Under the new rules, Wife’s executor can file an estate tax return which includes the value of Wife’s assets as of her date of death. This preserves her remaining $3.5 exemption which Husband can use at his death. It is crucial that Wife’s estate tax return is filed and within nine months after Wife’s death.
Portability of the deceased spouse’s unused exemption expires at the end of 2012. Some estate planning experts believe portability will be renewed by Congress.
Contact your estate planning attorney for more information.