Megan E. Cannella,left, and Frederick K. Schoenbrodt, II,right, of Bressler, Amery & Ross. Courtesy photos

What Is Portability?

"Portability" is the term used to describe a surviving spouse's use of the unused estate tax exclusion amount of a deceased spouse. Through application of the unified credit for estate and gift tax purposes to gratuitous transfers of wealth during life or at death, every U.S. citizen and domiciliary may exclude from federal estate and gift taxation an aggregate amount of the value of those transfers. That amount, known as the basic exclusion amount, is currently at a historic high of $12,920,000 per person. See Treas. Reg. Section 20.2010-1(e) (2019). At death, an individual who made no taxable gifts during life will have the entire basic exclusion amount remaining. An individual who made taxable gifts during life will have something less than the full basic exclusion amount remaining since a portion would have been applied to those lifetime gifts. In either event, the remaining basic exclusion amount, full or partial, will be available to apply against taxable transfers occurring at the individual's death.