Losing a spouse is one of the most difficult experiences in life. On top of the emotional toll, financial and legal concerns can feel overwhelming. The last thing you should have to think about in times of grief is how it impacts your estate and your finances, but there are tools to help you through this time.
There are certain estate planning tools available that can help them secure their financial future. One of the most important options available to a surviving spouse is the portability election, which can help reduce or eliminate estate taxes.
Understanding how a portability election works and taking the proper steps to claim it can make a significant difference. The IRS has extended the deadline for making this election, giving families more time to benefit. If you’re in Miami or anywhere in South Florida, learning about this opportunity now can help ensure that you and your spouse’s assets are protected for the future.
What Is a Portability Election in Estate Planning?
A portability election allows a surviving spouse to inherit the unused portion of their deceased spouse’s federal estate tax exemption. This means that instead of losing the exemption amount, it can be transferred to the surviving spouse, increasing the wealth that can pass to heirs without tax.
Without portability, a surviving spouse could face significant estate taxes, especially if assets such as real estate, business interests, or investments continue to appreciate over time. Since 2011, the federal government has allowed surviving spouses to use portability to maximize their tax benefits. However, this is not automatic—it requires filing an election with the IRS within a specific timeframe.
The IRS recently extended the deadline for claiming portability. Instead of just 15 months after a spouse’s passing, surviving spouses now have two years to file. This extra time can be valuable, but missing the deadline means forfeiting the exemption, which could cost families substantial taxes.
How Can I Structure My Estate Plan to Use These Elections?
Portability elections work best when they are part of a well-structured estate plan. Relying solely on portability without additional planning could leave assets vulnerable to future tax law changes. For many families in Florida, setting up a trust alongside a portability election can help preserve wealth and reduce tax exposure.
One common approach is using a bypass trust or credit shelter trust, which holds assets in a way that allows both spouses to maximize their exemptions. This can provide added protection against creditors and prevent unnecessary tax burdens on heirs.
Additional strategies may be necessary to protect assets for larger estates that exceed federal tax thresholds. Gifting strategies, charitable planning, or using irrevocable life insurance trusts (ILITs) can help reduce taxable estate values. With Florida’s booming real estate market and rising property values, taking proactive steps now can ensure that assets remain protected for future generations.
Estate Planning Peace of Mind
Estate planning decisions impact the financial security of your loved ones. If your spouse recently passed away, or if you want to review your estate plan, now is the time to take action. The IRS has given families more time to claim a portability election, but deadlines still apply. Taking the right steps today can prevent unnecessary taxes and protect your assets for the next generation. Call the Law Office of Ray Garcia in Miami to better understand your estate planning needs and learn how to take full advantage of these important legal tools.
Garcia & Garcia Attorneys at Law
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