The Role of Portability in Estate Tax Planning

Estate planning is filled with strategies designed to protect your legacy—but not all of them are widely known. One powerful yet often overlooked tool is portability.

At The Lansky Law Firm, we help Tennessee families achieve peace of mind through preparation by uncovering smart strategies that make a big difference. Portability is one of those tools—especially relevant for married couples concerned about minimizing estate tax burdens.

What Is Portability?

Portability allows a surviving spouse to inherit the unused federal estate tax exemption of their deceased spouse.

In 2025, the exemption amount is $13.99 million per individual, meaning a married couple can potentially transfer up to $27.98 million to their heirs without incurring federal estate taxes—but only if they plan correctly.

Here’s the Catch: Portability Isn’t Automatic

To benefit from portability, the estate of the first spouse to die must file IRS Form 706, the federal estate tax return—even if no estate tax is due. This form:

• Must be filed within nine months of the date of death (an extension may be requested).

• Is required solely to preserve the unused exemption amount.

• Is frequently overlooked if the estate seems small—leading to a lost opportunity for significant tax savings.

Why It Matters Right Now

Under current law, the generous estate tax exemption is scheduled to sunset at the end of 2025, cutting the exemption nearly in half to around $7 million per person (adjusted for inflation).

This means that electing portability today could lock in the higher exemption—even if the exemption is lower when the surviving spouse passes. That makes 2024 and 2025 critical years to review and update your estate plan.

Key Limitations of Portability

While portability can be valuable, it’s not a catch-all solution. Consider these important caveats:

• Post-Death Deadline Portability must be elected within a specific time frame—miss it, and the exemption is lost forever.

• No Help with GST Tax Portability does not apply to the generation-skipping transfer (GST) tax, which means it won’t benefit grandchildren or further generations.

• State Estate Taxes Some states impose their own estate taxes and do not allow portability. Tennessee does not currently have a state estate tax, but laws can change—so it’s important to plan with both federal and future state considerations in mind.

More Than Just Portability: A Holistic Approach

Portability is just one tool in your estate planning toolbox. In many cases, additional strategies such as:

• Lifetime gifting

• Irrevocable trusts

• Charitable giving

• Spousal Lifetime Access Trusts (SLATs)

...can help reduce your taxable estate more effectively and offer greater control over how your legacy is distributed.

Let’s Make Sure Your Plan Is Ready—When It Matters Most.

At The Lansky Law Firm, we’re here to help you make sense of the complexities of estate tax law and create a plan that preserves what matters most—your peace of mind and your family’s future.

Visit Us: 6800 Poplar Ave #225, Memphis, TN 38138 Call Us: (901) 767-7006 Learn More: www.lanskylawfirm.com

The Lansky Law Firm Peace of Mind through Preparation.