Can My Surviving Spouse Use Two Estate Tax Exclusions?

Can My Surviving Use Two Estate Tax Exclusions? We have an estate tax on the federal level in the United States, and there are also a number of states in the union that impose state-level estate taxes. There are many great things about living in Texas, and one of them is the fact that there is no state-level estate tax in our state.

However, if you own valuable property in a state with an estate tax, you could face exposure in that state, so you should keep this in mind when you are evaluating your position.

The federal estate tax is only a problem for people who have been able to accumulate a significant amount of property, because there is an estate tax exclusion that is relatively generous. This exclusion is the amount that you can transfer before the estate tax would be applied.

Before we continue, we should touch upon the existence of the federal estate tax marital deduction. This deduction allows for unlimited tax-free property transfers between citizen spouses. The tax is only applicable on transfers to others.

For the remainder of the 2015 calendar year, the federal estate tax exclusion stands at $5.43 million. The exclusion is indexed for inflation and will increase to $5.45 million in 2016.

Surviving Spouse

These days, most married people work, so the wealth that is accumulated by a couple is the product of the contributions of two different people. So, you might expect that a surviving spouse could utilize his or her own exclusion along with the exclusion that his or her deceased spouse was entitled to.

Prior to the 2011 calendar year, this was not possible. However, a piece of legislation that was passed at the end of 2010 changed the lay of the land. A provision contained within this measure made the exclusion portable between spouses, so a surviving spouse was allowed to use two estate tax exclusions.

However, this arrangement was only in place until the end of 2012, because that was when the aforementioned legislative measure was scheduled to expire. Fortunately, the American Taxpayer Relief Act of 2012 was passed at the very end of December of 2012, and a portion of this measure made the portability of the exclusion between spouses permanent.

Estate Tax Report

Many people in the greater Dallas area are exposed to the estate tax. If you are among them, you should certainly equip yourself with as much information as you can so that you can take the appropriate legal steps to preserve your wealth.

We have prepared a well researched, comprehensive special report that puts the federal estate tax under the microscope. You can access your copy of the in-depth special report through this website.

The report is being offered to our readers on a complimentary basis right now, so there is no reason to take pause. To get your copy of the report, click this link and follow the simple instructions: Free Estate Tax Report.