New IRS Procedure Give Families More Time to Handle Estate Taxes

The IRS recently released a revenue procedure that offers some widows and widowers more time to deal with the complexities of the estate tax.

After a spouse dies, the surviving partner usually inherits the estate. In some cases, the IRS offers “portability” to surviving spouses to minimize the impact estate taxes have on married couples with larger estates.

What is portability in estate planning?

Portability allows a surviving spouse to apply the deceased spouse’s unused estate tax exemptions toward his or her estate during life or at death. The option allows the surviving spouse the ability to shelter assets from gift tax (while living) and estate taxes (after death).

What is the new revenue procedure?

Before the new rule, the widow or widower had up to 15 months from the time of the spouse’s death to elect the portability of the deceased spousal unused exclusion (DSUE). In 2017, the application window was extended to two years, and in July of 2022, the IRS extended the deadline to five years. The change means less stress for widows, widowers, and families and tax savings.

Help is available

The estate planning attorneys at O’Reilly Rancilio are available to answer your questions on the new revenue procedure and whether your estate would benefit from portability. For more information, call 586-726-1000 or visit our website.