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Porting a Deceased Spouse’s Estate Tax Exemption

Marylanders are subject to both Federal and Maryland Estate Tax – taxes on most property in which a deceased individual has an interest at the time of death.  In many cases, the tax code offers relief that results in no tax due.  Unlimited deductions are available for amounts left to a surviving spouse or qualified charity, and other beneficiaries are protected from tax by a Federal Estate Tax exemption of more than $11 Million and a Maryland Estate Tax exemption of $5 Million.

While there is often no tax due when the first spouse of a married couple dies because of the unlimited spousal deduction,the surviving spouse should consider whether he or she might benefit from “porting” the deceased spouse’s unused estate exemptions.  A ported exemption is added to the survivor’s own exemptions, thus increasing the amount of assets that will be protected from estate tax on the survivor’s later death.

To effectively port a deceased spouse’s exemption, estate tax returns must be timely filed – generally no later than 9 months after the first spouse’s death.  In many cases, the often arduous, time consuming, and expensive task of preparing estate tax returns can be significantly simplified when the sole purpose of the returns is to port exemptions.

Our firm frequently prepares U.S. and Maryland estate tax returns.  Please contact us if you would like to discuss porting a deceased spouse’s estate tax exemptions.  We are also available to discuss other strategies to reduce a surviving spouse’s taxable estate and minimize the ultimate tax burden.