With the estate tax seemingly up in the air and changing from year to year, many wonder what the current state of affairs is regarding the federal estate tax. Thankfully, the IRS finally providing some guidance on the estate tax affecting people who die in 2011 and 2012. Currently, there is a $5 million exemption from the estate tax for each individual, or a $10 million exemption for married couples. Moreover, if filed correctly, any exemption not used by the first spouse to die may be “ported” over to the surviving spouse to use at the second spouse’s death. However, in order to take advantage of this portability option, the Executor in charge of administering the first spouse’s estate (regardless of estate size) must file the proper IRS forms, otherwise this portability option will be lost.
To learn more about how to take advantage of this portability option, read this article.