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“Missed opportunity to make a portability election…or not?” by Beth K. Flowers

In 2010, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act (“2010 Tax Act”) introduced the concept of portability, which allows a surviving spouse to add to his or her own estate tax exemption whatever amount of exemption the deceased spouse had not used. The American Taxpayer Relief Act of 2012 then made portability permanent.

To claim portability, a complete and timely filed Estate Tax Return is required to be filed. An Estate Tax Return is required to be filed nine (9) months after date of death (plus the option to request a six-month extension). Since the concept of portability was new, many surviving spouses/executors failed to file a return to claim portability at the time of the death of a spouse and the IRS has been inundated with requests to allow late filing of an Estate Tax Return to allow a portability election to be made. In response to the countless requests for relief, the IRS issued Revenue Procedure 2017-34 which grants a permanent automatic extension of time to file an estate tax return just to claim portability beyond the original nine-month filing deadline. For any individual who dies after 2010, an estate tax return may now be filed by the later of January 2, 2018, or the second anniversary of the decedent’s date of death.

Beth K. Flowers is a shareholder at Mathis, Marifian & Richter who focuses her practice in estate planning, real estate law and business law. Beth spends a great deal of her time helping executors and trustees administer estates and trusts during the difficult time after the passing of a loved one in an effort to make the administration process as smooth and uneventful as possible.

Professional Services Disclaimer: Please note that the information presented here is as an educational service, and while it contains information about legal issues, it is not legal advice. No warranty is made regarding the applicability of the information presented to a particular client situation, and the information set forth is not a substitute for original legal research, analysis and drafting for a particular client situation.