I’m Darrin Mish. Tampa tax attorney, 32 years in, more than $100 million in IRS debt resolved. What follows isn’t theory – it’s what I’ve actually watched work.
Think the federal estate tax doesn’t apply to you? With today’s $15 million exemption per person—effectively $30 million for married couples thanks to the One Big Beautiful Bill Act making these amounts permanent—you might be right. For now.
But here’s what keeps me up at night as a tax professional: married couples who assume the estate tax will never touch them and skip a simple filing that could save their families millions of dollars down the road. I’m talking about the portability election, and if your estate plan doesn’t account for it, your surviving spouse could be staring at an absolutely devastating tax bill that was completely preventable.
Let me explain why this matters, even if your estate is nowhere near $15 million.
What Is the Federal Estate Tax Portability Election?
The portability election is one of the most powerful estate planning tools in the tax code, and it’s shockingly underused. Here’s how it works in plain English.
When one spouse dies, they may not use their entire $15 million federal estate tax exemption. Maybe they only had $1 million in assets. That leaves $14 million in unused exemption sitting on the table.
The portability election allows the surviving spouse to claim that unused exemption and add it to their own $15 million exemption. So instead of having a $15 million exemption, the surviving spouse now has a $29 million exemption.
To make this election, the executor of the deceased spouse’s estate must file Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return, even if no estate tax is owed. The form must be filed within nine months of the date of death, with a possible six-month extension.
If the executor fails to file Form 706 on time, the portability election is lost. Forever. The surviving spouse is stuck with only their own exemption, and no amount of amended returns or IRS appeals can fix it.
Why Would Anyone Bother Filing When No Tax Is Due?
This is the question I hear constantly, and it’s the question that leads to million-dollar mistakes.
If a spouse dies with an estate well under $15 million, there’s no estate tax to pay. No tax liability at all. So why go through the hassle and expense of filing a complex estate tax return?
The answer is insurance. Filing Form 706 to elect portability costs you nothing but the preparation fee—there’s no tax due, so there are no penalties or interest to worry about. But the payoff can be enormous.
Consider this scenario: You’re married, and your combined estate is worth $8 million. Your spouse passes away, and their estate is valued at $3 million. No estate tax is owed because the $3 million is well under the $15 million exemption. It seems pointless to file Form 706.
But what happens if the law changes? What if Congress reduces the exemption to $5 million or even $2 million in the future? Politicians change the rules all the time. If your spouse’s executor made the portability election, you’d have your own $15 million exemption plus your deceased spouse’s unused $12 million—giving you a combined $27 million shield. Without the election, you’d have only the new, reduced exemption amount.
Real-World Examples That Show the Stakes
Let me walk you through some scenarios that illustrate exactly how devastating it can be to skip the portability election.
Scenario 1: The “It Won’t Apply to Us” Mistake
Graham dies in 2026 with a $1 million estate. His wife Hanna survives him. Graham’s executor, thinking the estate is too small to bother with, doesn’t file Form 706. No portability election is made.
Fast forward several years. Hanna’s estate has grown to $28 million through a combination of inheritance, investment growth, and the sale of the family business. Hanna passes away.
If Graham’s executor had filed Form 706 and elected portability, Hanna’s estate would have had a combined exemption of approximately $29 million (her $15 million plus Graham’s unused $14 million, adjusted for inflation). The estate tax would have been minimal or zero.
But because the portability election was never made, Hanna’s estate only has her own $15.5 million exemption. The taxable portion of her estate—about $12.5 million—gets hit with federal estate tax at rates up to 40 percent. The estate tax bill: over $4 million.
That’s $4 million in completely avoidable taxes, all because an executor decided that filing a “unnecessary” tax return wasn’t worth the trouble.
Scenario 2: What If Congress Slashes the Exemption?
Gemma dies in 2026 with a $1 million estate. Her executor wisely files Form 706 and elects portability, passing $14 million in unused exemption to her surviving spouse, Henry.
Henry passes away in 2029. By then, hypothetically, Congress has reduced the exemption to just $2 million with a 60 percent tax rate. Henry’s estate is worth $5 million.
Because Gemma’s executor made the portability election, Henry’s estate has his $2 million exemption plus Gemma’s $14 million portable exemption—a total of $16 million. Henry’s $5 million estate owes zero federal estate tax.
Without the portability election, Henry’s estate would have only a $2 million exemption. The remaining $3 million would be taxed at 60 percent, resulting in an estate tax bill of $1.8 million.
Scenario 3: Growing Wealth Makes Portability Essential
Glenn dies in 2026 with a $1 million estate. His executor files Form 706, electing portability and passing $14 million in unused exemption to Glenn’s surviving spouse, Harper.
Harper passes away years later with an estate worth $29 million. With the portability election, Harper’s estate has a combined exemption of approximately $29 million, resulting in little to no estate tax.
Without the election, Harper would have only her own $15 million exemption. The remaining $14 million would be subject to estate tax at rates up to 40 percent—a tax bill exceeding $5.6 million.
Important Rules and Limitations You Need to Know
The portability election comes with several important rules that every married couple and their estate planners need to understand:
The filing deadline is strict. Form 706 must be filed within nine months of the date of death, plus a possible six-month extension. Miss this deadline, and the election is gone. There are very limited relief provisions for late filings, but you should never count on them.
Only the most recently deceased spouse’s exemption ports. If you’ve been married multiple times, only the unused exemption of your most recently deceased spouse can be passed to you. You can’t stack exemptions from multiple deceased spouses.
The portable amount is the lesser of two numbers. For someone who dies in 2026, the maximum portable exemption is limited to $15 million minus the amount used by the deceased spouse’s estate. So if the deceased spouse’s estate used $5 million of their exemption (because they left $5 million to children from a prior marriage, for example), only $10 million can be ported to the surviving spouse.
There’s no penalty for filing when no tax is due. The late filing penalty for Form 706 is calculated as a percentage of unpaid tax. If the estate owes no tax (because it’s below the exemption), the penalty is zero. The only cost of filing is the preparation fee.
The estate doesn’t have to be large to benefit. Even a modest estate benefits from the portability election because it preserves the unused exemption as a hedge against future changes in the law or unexpected growth in the surviving spouse’s wealth.
What You Should Do Right Now
If your spouse has passed away and an estate tax return was never filed, talk to a tax professional immediately about whether late relief is available. The IRS has provided some provisions for late portability elections, but the window isn’t open forever.
If you’re doing estate planning for your family, make sure your estate plan includes explicit instructions for your executor to file Form 706 and elect portability, regardless of the size of your estate. This instruction should be in your will, your estate planning documents, and communicated directly to your chosen executor.
If you’re an executor of a recently deceased person’s estate, file Form 706 even if no tax is due. The cost of preparation is minimal compared to the potential millions in tax savings the portability election can provide to the surviving spouse.
The portability election is one of the simplest, most cost-effective estate planning moves available under the tax code. Failing to make it is a gamble with potentially catastrophic consequences for your family. Don’t let a simple administrative oversight turn into a multi-million-dollar estate tax bill.