How to Unlock the Power of Portability: A Guide for Texas Spouses

Find Out How & When Portability May Be an Optimal Solution in Marital Estate Planning

Imagine this — you and your spouse spend years carefully planning your estate to try to preserve as much as possible for your beneficiaries. When your spouse passes away, however, you are suddenly left facing unexpected estate taxes, lost assets, and far fewer financial resources than you ever expected. 

That unfortunate scenario is a major estate planning fear, and it can be more common than many people realize, especially approaching 2026 when estate tax exemptions are set to decline drastically. With that, surviving spouses could experience far greater challenges after their partners pass while seeing more of their assets siphoned off to estate taxes.

As unsettling as that may be, it’s not inevitable. You can effectively avoid it with a little-known provision called portability.

Unpacking the essentials to reveal how this strategy may work for you (now or in the future), this guide to portability dives into: 

To get confidential answers specific to your circumstances and needs, simply contact TAW Law Texas. 

Portability Defined: What Is Portability in Probate & Estate Planning?

Portability is a legal mechanism by which one spouse can claim — or “port” — the unused portion of a deceased spouse’s estate and gift tax exemption. As a federal estate tax provision (CFR § 20.2010-2), portability can open up a way for surviving spouses to:

• Combine their deceased spouse’s unused exemption with their own individual exclusion
• Potentially double the exemption applicable to their estate when they pass away
• Reduce or bypass estate tax obligations, preserving more assets for the next generation (after the surviving spouse passes).

With that, portability can be crucial to consider at various junctures, including when it’s time to engage in estate planning for married couples, right after a spouse dies, and when preparing to initiate Texas probate. 

Keep in mind, however, that: 

• Portability isn’t for everyone: While many high-net-worth couples can benefit from portability, it may not make sense (or cents) in every situation. That can include smaller estates that may pass to heirs tax-free, regardless of portability.
• Portability is complex: Strict deadlines, specific forms, and various rules apply to portability and the gateway it can open to higher estate tax exemptions for widows and widowers. Compliance is integral to successful portability elections.
• Portability may not cover all your bases: If portability is a viable option for you, be sure to consider how it fits into a larger estate plan. While portability can do a lot to mitigate estate taxes and protect family assets, it’s not a comprehensive solution to address all estate planning needs and goals. Depending on your assets, heirs, and other factors, additional devices may be needed.

How Portability Works (How to Elect Portability)

Portability does not automatically come into play for a surviving spouse after their husband or wife passes away. Instead, that surviving spouse will have to “elect” portability — meaning take action to “port” the untouched exclusions — if they want to claim their deceased partner’s unused exemptions. 

Here’s a general rundown of what it takes to elect portability after a husband or wife passes away:

1. The Portability Election: The surviving spouse will need to file an estate tax return (IRS Form 706) to elect portability. This must be done within nine (9) months of their spouse’s death, unless they request an extension. If granted, extensions typically extend the filing deadline by 6 months.
2. The Deceased Spousal Unused Exclusion (DSUE): The unused exemption amount is referred to as the DSUE. When one spouse passes away, the amount of any estate tax exemptions that spouse did not use become the DSUE that the surviving spouse can apply to their own estate.
3. Combined Exemptions: When the surviving spouse passes away, their own individual estate tax exemption can be combined with the DSUE from their deceased spouse, allowing for a larger tax-free estate.

Portability and higher estate tax exemptions can put unused exclusions back in play for surviving spouses at a crucial time when they may be inheriting assets from a deceased spouse, meaning their estate could be increasing in scope and value. Portability can offset that, sheltering more assets from estate and gift taxes.

What Does Portability Look Like in Action? An Example 

Let’s walk through a concrete example with some numbers to see how portability works and what can happen if a surviving spouse fails to elect portability.

Let’s say Jack and Jane are married in Texas, and they own a home, retirement accounts, and investments worth roughly $18 million. Jack passed away on January 3, 2024. At the time (and throughout 2024):

• Estate tax exemptions are $13.61 million per individual and $27.22 million for a married couple. 
• Jack had not used his individual estate tax exemptions, leaving the $13.61 million in exclusions untouched and still on the table.
• Jane inherits the marital assets from Jack tax-free, and her individual estate is now worth ~$18 million.

In this scenario, Jane would have until October 3, 2024, to elect portability (if she does not request an extension). If she requests an extension and it’s granted, Jane would have until April 3, 2025, to elect portability.

Either way, if Jane ends up:

• Electing portability, she can port Jack’s unused exemption or the DSUE and “inherit” his $13.61 million exclusion, adding it to her own. That would give her a total exemption of $27.22 million for her ~$18 million estate. With that, Jane’s estate is fully covered by her available exemption, and no estate taxes would be owed, allowing for a tax-free transfer of assets to the chosen beneficiaries upon Jane’s death.
• Not electing portability, Jack’s unused exemption would be lost, and Jane would only be able to use her individual $13.61 million exclusion for her ~$18 million estate. That leaves about $4.39 million potentially subject to estate tax rates of 40% upon her death (if no other actions are taken to protect her estate before then). If that happens, Jane’s beneficiaries could see a gut-wrenching ~$1.76 million estate tax bill.

These numbers can drive home how powerful portability can be for surviving spouses with substantial estates. They may not, however, help these parties elect portability when necessary. The tips that follow can, however.

5 Key Tips for Electing Portability After a Spouse Dies

Portability can offer extra flexibility at a crucial time. To apply it with optimal success, some deeper knowledge of the ins and outs of this complex provision can be essential. So can these tips:

1. File the required form before the deadline: File IRS Form 706 within 9 months of the death of your spouse or plan to request an extension. Whether or not you have an extension, keep an eye on your filing deadline. If you miss it, you can lose the chance to elect portability.
2. Be aware of how a second (or subsequent) marriage can impact portability: If a surviving spouse remarries, they can only use the DSUE from their current spouse if (s)he dies, not a prior or ex-spouse. This is a pivotal consideration when it comes to estate planning and future marriages.
3. Don’t lean on portability alone: Portability can be an important component of a comprehensive estate plan alongside a will, trusts, a family-limited partnership, and/or other devices. If you’re serious about preserving assets and minimizing estate tax bills in the future, it’s generally imprudent to rely on portability alone.
4. Keep an eye on changing estate tax exemptions: While exclusions will be adjusted for inflation in 2025, they are set to drop by roughly half on Jan. 1, 2026, putting estate tax exemptions at ~$7 million per individual and ~$14 million per married couple (find out more about how to get ahead of sunsetting estate tax exemptions before 2026 here). With that, far more estates could be subject to estate taxes — and the election of portability will likely become even more crucial for surviving spouses.
5. Work with an experienced lawyer: An experienced estate planning attorney, like the lawyers at TAW Law Texas, can help you navigate the complexities of portability and, when appropriate, elect this provision. That can mean stepping into the driver’s seat to handle IRS forms, deadlines, recordkeeping, and more for added peace of mind and optimal results.

How to Find Out More About Your Options for Portability 

If portability is an option for increasing your available estate tax exemptions, there may be limited time to take action and elect this provision. Plus, any errors made in the essential forms, exemption calculations, and other facets of portability could give rise to new pricky, wallet-draining challenges.

To avoid that and find out how portability may work for you and your estate, contact a trusted estate planning lawyer at TAW Law Texas.

Email us or call 512-827-9212 to talk to a trusted
estate planning lawyer in Austin now.

As leading probate and estate planning attorneys in Austin, TAW Law Texas has a long-standing reputation for exceptional counsel and value-focused solutions. We routinely represent individuals, businesses, family offices, and other parties throughout Travis County, Williamson County, Bastrop County, Blanco County, Hays County, and beyond. 

We are also committed to going the extra mile for our clients, which is why we offer two tiers of probate representation, including premium probate services. We invite you to check out our reviews to see what our clients have to say about us and what we may be able to do for you.

Todd A. Wilson

Todd A. Wilson has been practicing law since 2007, with the aim of educating all strata of society and sharing crucial insights about the importance of estate planning, probate, and more.

The Law Office of Todd A. Wilson (also known as TAW Law TX) offers affordable estate planning and probate services.

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