When a loved one passes away, taxes may be the last thing on a family’s mind. But skipping a key step, filing an estate tax return, even when no tax is due, can lead to the permanent loss of estate tax portability. This oversight, though common, can cost families millions in avoidable estate taxes down the line.
Estate tax portability allows a surviving spouse to inherit the unused federal estate tax exclusion of their deceased spouse. In 2026, the federal estate tax exclusion is $15 million per person. A married couple can effectively pass on up to $30 million tax-free to their heirs.
But here’s the catch: portability isn’t automatic. To secure it, the executor of the deceased spouse’s estate must file IRS Form 706, even if no estate tax is owed. If this step is skipped, the surviving spouse permanently loses the unused exemption, leaving their estate vulnerable to future taxes.
Many families assume they don’t need to worry about the estate tax because their assets fall below the exclusion threshold. But there are three key reasons portability is worth preserving:
The death of a spouse is a deeply emotional time, but taking the time to file IRS Form 706 can preserve a financial cushion that could save your family millions. Even if no taxes are due today, preserving portability protects your estate against future changes and growth.
In estate planning, timing and paperwork matter. And sometimes, the most valuable thing you can leave behind is not just money, but the ability to transfer it wisely. An estate planning attorney will guide you through the process and help ensure no opportunity is lost.
Call us today to schedule a free initial consultation, (605) 275-5665.
Read More: One Common Estate Tax Error That Could Cost You