Portability Elections Must Be Timely and Complete to Preserve Access to DSUE
Portability can be one of the most valuable estate-planning tools for married couples — but it only works if it’s done correctly, completely, and on time. Recent cases and IRS guidance continue to reinforce a critical point: 👉 If a portability election is late, incomplete, or improperly filed, access to the Deceased Spousal Unused Exclusion (DSUE) can be permanently lost. This article explains what portability is, why it matters, and how easily families can lose it if deadlines or filing requirements are missed.
What Is Portability and DSUE?
Portability allows a surviving spouse to use the unused portion of a deceased spouse’s federal estate and gift tax exemption.
That unused amount is called the Deceased Spousal Unused Exclusion (DSUE).
In simple terms:
Each spouse has a lifetime estate and gift tax exemption.
If the first spouse dies without using all of their exemption,
The survivor can “port” (carry over) the unused amount if a proper election is made.
This can mean millions of dollars in additional tax protection for the surviving spouse.
How Is Portability Elected?
Portability is not automatic.
It requires:
✔ Filing a timely federal estate tax return (Form 706) for the deceased spouse
✔ Even if the estate is below the filing threshold
✔ Properly and completely electing portability on the return
If no return is filed, portability is lost.
The Critical Timing Requirement
Normally, Form 706 must be filed:
Within 9 months of death, or
Within 15 months if a 6-month extension is timely requested
If this deadline is missed, the DSUE is lost — unless the estate qualifies for limited IRS relief.
The IRS has provided some relief procedures for smaller estates, but those rules are strict, technical, and not guaranteed.
Why “Complete” Matters Just as Much as “Timely”
Even when a return is filed on time, portability can still be lost if the filing is incomplete or defective.
Common problems include:
Failing to properly compute DSUE
Leaving required schedules blank
Omitting asset information
Incorrect valuation disclosures
Failing to check the portability election box
Filing a “bare-bones” return that doesn’t meet regulatory requirements
Courts and the IRS have made clear:
👉 An incomplete or non-compliant return can invalidate the portability election.
Why Losing DSUE Is a Big Deal
If portability is lost:
The surviving spouse may face estate tax exposure later
Planning options become more limited
Large appreciation after the first spouse’s death may become taxable
Second marriages and blended families face greater risk
Opportunities for lifetime gifting may be reduced
Once lost, DSUE cannot be recreated.
Portability Is Not a Substitute for Trust Planning
While portability is powerful, it has limitations:
It does not protect appreciation after the first death
It does not apply to the GST exemption
It may be lost if the surviving spouse remarries and outlives the new spouse
It provides no asset protection or control features
For many families, portability should be coordinated with:
Credit shelter trusts
Lifetime trusts
Marital trusts
State estate tax planning
Long-term care and elder law strategies
Best Practices to Preserve DSUE
To protect portability:
✔ Review estate plans immediately after the first spouse’s death
✔ Calendar Form 706 deadlines early
✔ File even when no tax is due
✔ Ensure complete asset disclosure and proper valuation
✔ Work with experienced estate tax counsel
✔ Avoid rushed or “minimal” filings
✔ Confirm the portability election was properly made
Portability is too valuable to risk on shortcuts.
What This Means for Families and Advisors
For families:
Don’t assume “no tax due” means “no filing required”
A missed return today can mean a major tax bill tomorrow
For advisors:
Portability review should be standard after the first death
Filing decisions should be deliberate, not reactive
Documentation and completeness matter as much as deadlines
Final Thought
Portability can preserve millions in estate tax protection — but only if the election is made in a timely and complete manner.
A missed deadline or incomplete filing can permanently eliminate DSUE, leaving surviving spouses exposed to unnecessary tax risk.
In estate planning, details matter — and portability is one area where precision is everything.