Written by Hazel Secco, CFP®, CDFA®
Table of contents
- What Is the Portability Election?
- Why File Form 706 for Portability When No Estate Tax Is Due?
- How Much Can the DSUE Amount Save? A Worked Example
- What Are the Portability Deadlines in 2026?
- What Can Reduce or Erase the DSUE Amount Later?
- How Do New Jersey and New York Treat Portability?
- What to Do This Week
- Frequently Asked Questions
- Get the First-Year Checklist
- Sources
Your husband’s estate is settling. Everything passes to you, nothing is owed to the IRS, and the estate attorney still brings up a federal estate tax return. It is a long form, it comes with a professional fee, and on its face it produces a tax bill of zero. The reason to file is the portability election, and for a widow with significant assets it can be one of the most valuable filings of the first year.
Portability lets you keep the part of your husband’s federal estate tax exclusion that his estate did not use. For 2026 deaths, each person’s basic exclusion amount is $15,000,000. If his estate used none of it, up to $15,000,000 can be added to your own exclusion, but only if his executor files a complete Form 706 on time and makes the election.
Below is how the election works under the 2026 rules, what it is worth for a hypothetical $14 million household, the deadlines, what can shrink the amount later, and how New Jersey and New York fit in.
What Is the Portability Election?
The portability election is a choice made on a deceased spouse’s federal estate tax return (Form 706) that transfers his unused estate tax exclusion to the surviving spouse. The transferred amount is called the deceased spousal unused exclusion, or DSUE amount. It is added to the survivor’s own exclusion and can shelter her later lifetime gifts and her estate.
Under federal law, a surviving spouse’s total exclusion is her own basic exclusion amount plus any DSUE amount. The basic exclusion amount is $15,000,000 for deaths and gifts in 2026, up from $13,990,000 in 2025. The DSUE amount is the lesser of the basic exclusion amount or the part of the deceased spouse’s exclusion that his taxable estate and lifetime taxable gifts did not use.
Many first estates owe nothing because of the marital deduction. Property passing to a surviving spouse who is a U.S. citizen is deducted from the taxable estate with no dollar cap, so his taxable estate can be $0 and his full exclusion unused. (A noncitizen spouse is treated differently.)
Why File Form 706 for Portability When No Estate Tax Is Due?
Filing Form 706 for portability can make sense when the surviving spouse’s own estate could someday exceed her own exclusion. The return costs money now in preparation fees and valuations. Skipping it can mean 40% federal estate tax later on amounts the DSUE would have sheltered. The decision turns on how large your estate could become, and over how many years.
Growth after his death
The assets you inherit keep compounding in your name, alongside your own savings, equity compensation, real estate, and any life insurance you own. A widow in her 50s may have decades of growth ahead, and an estate comfortably under the line in 2026 can cross it later.
The exclusion amount can change
The July 2025 tax law (Public Law 119-21, widely called the One Big Beautiful Bill Act) set the basic exclusion amount at $15,000,000 for 2026, indexed for inflation after 2026, and removed the drop that had been scheduled after 2025. The amended statute has no scheduled sunset. That is the law today, and a future Congress can amend it. The DSUE amount is computed using the exclusion amount in effect in the year of your husband’s death and recorded on his return.
How Much Can the DSUE Amount Save? A Worked Example
On a large enough estate, the DSUE amount can remove millions of dollars of federal estate tax. The federal estate tax rate schedule reaches its top rate of 40% above $1,000,000, so once an estate is above the exclusion, each additional dollar sheltered by DSUE saves 40 cents of federal estate tax.
Here is a hypothetical composite, not a real client. Her husband dies in 2026 with a $4,000,000 estate, all passing to her through the marital deduction. His taxable estate is $0 and he made no taxable gifts during life, so his DSUE amount is the full $15,000,000. With what she inherited, her own savings, and her home, she now has $14,000,000. Assume it grows 4% a year after inflation, and hold her own exclusion at the 2026 figure of $15,000,000 so everything stays in 2026 dollars.
| Her estate at death (hypothetical) | Federal estate tax, no portability ($15M exclusion) | Federal estate tax, with $15M DSUE ($30M exclusion) |
|---|---|---|
| $14,000,000 (no growth) | $0 | $0 |
| $22,400,000 (12 years at 4%) | $2,960,000 | $0 |
| $28,400,000 (18 years at 4%) | $5,360,000 | $0 |
The tax is the tentative tax on the estate minus the tentative tax on the exclusion, using the federal rate schedule. Because both figures are above $1,000,000, the difference is 40% of the excess. At $22,400,000, that is 40% of $7,400,000, or $2,960,000.
At $14,000,000 the election changes nothing on paper. Twelve years later it is worth almost $3,000,000 to her heirs, which is why the math points to pricing the Form 706 against what her estate could reach.
What Are the Portability Deadlines in 2026?
The portability election must be made on a complete, properly prepared Form 706 filed within 9 months of the date of death, or within 15 months if Form 4768 is filed by the 9-month due date, which gives an automatic 6-month extension. An estate that was not otherwise required to file has a second route, an IRS relief procedure (Rev. Proc. 2022-32) that allows a late election up to the fifth anniversary of the death.
| Rule | Figure or deadline | Source |
|---|---|---|
| Basic exclusion amount, 2025 deaths | $13,990,000 | Rev. Proc. 2024-40 |
| Basic exclusion amount, 2026 deaths | $15,000,000, indexed after 2026 | Rev. Proc. 2025-32 |
| Form 706 due date | 9 months after death | Treasury regulations |
| Extension | Automatic 6 months, Form 4768 filed by the 9-month due date | IRS FAQ |
| Late election, estates not otherwise required to file | By the 5th anniversary of death | Rev. Proc. 2022-32 |
| New York exclusion, 2026 deaths | $7,350,000, no portability | NY Tax Department |
| New Jersey estate tax | None for deaths on or after January 1, 2018 | NJ Division of Taxation |
The 9-month deadline and Form 4768
The Treasury regulation treats an estate electing portability as required to file, so the 9-month due date applies even when no tax is owed. The election becomes irrevocable once that due date, including any extension actually granted, has passed. If a complete return is timely filed, portability is elected unless the executor affirmatively states on the return that the estate is not electing. An executor who timely files and opts out cannot later use the 5-year relief.
The 5-year window for a late election
The IRS relief procedure applies when the decedent died after December 31, 2010, was a U.S. citizen or resident, was survived by a spouse, and the estate was not otherwise required to file. The executor files a complete return by the fifth anniversary of the death with a required statement at the top saying the return is filed under Rev. Proc. 2022-32 to elect portability. There is no IRS user fee.
For 2026 deaths, a first estate with a gross estate of $1.5 million to $10 million falls under the $15,000,000 filing threshold (gross estate plus adjusted taxable gifts), so the window will often apply. The gross estate counts life insurance he owned, retirement accounts, and his share of joint property. Treat it as a safety net. The IRS may examine your husband’s return to determine the DSUE amount even after the normal assessment period has expired, so the valuations behind it matter for as long as you rely on it. In most cases, estates not otherwise required to file may estimate, with due diligence, the value of property qualifying for the marital or charitable deduction, which can lower the cost of the return.
What Can Reduce or Erase the DSUE Amount Later?
The DSUE amount can be lost if you remarry and your new spouse dies before you, because only the DSUE of your last deceased spouse counts. Lifetime gifts, on the other hand, can lock in DSUE that is already yours.
Remarriage and the last deceased spouse rule
The rules say you use the DSUE amount of your last deceased spouse, the most recently deceased person who was married to you at his death. Remarriage alone does not change who that is, and neither does a later divorce. If a second husband dies before you, he becomes your last deceased spouse, and his DSUE amount (possibly $0) replaces the first. DSUE you already applied to taxable gifts stays counted.
The gift rule works with this. A surviving spouse who makes a taxable gift is treated as using the DSUE amount first, before her own exclusion. For a widow who may remarry, or who wants to move assets to children or a trust during life, gifting can use DSUE before her own exclusion. Whether that fits her cash flow and retirement plan is a decision to model with her estate attorney and CPA.
How Do New Jersey and New York Treat Portability?
New Jersey has no estate tax for residents who died on or after January 1, 2018, so for a New Jersey widow the portability question is federal. New York has an estate tax with no portability, so a New York widow’s state exclusion stays at her own amount, $7,350,000 for 2026 deaths, whatever the federal return says.
New Jersey’s inheritance tax still applies to some heirs, but a surviving spouse, civil union partner, or domestic partner is a Class A beneficiary, and Class A is exempt. In New York, the state credit phases out between 100% and 105% of the exclusion and disappears above 105%, which works out to $7,717,500 for 2026 deaths. A New York widow near that line needs state planning in her own estate documents.
What to Do This Week
Write down the date of death plus 9 months. That is the Form 706 due date. Form 4768 has to be filed by that same date to get the 6-month extension, so the decision has to be made before the 9 months run out.
Ask the executor, in writing, whether a Form 706 will be filed to elect portability. If you are the executor, put the question to your estate attorney. The election is made on his estate’s return.
Gather the valuation records now. Date-of-death statements for every account, real estate appraisals, business valuations, and life insurance claim forms.
Project your estate 10 and 20 years out. Include what you inherited, your own savings, home equity, and life insurance you own, then compare it to $15,000,000.
If you live in New York, raise state estate tax separately. Portability does not touch the $7,350,000 New York exclusion.
Portability sits inside a longer first year, and what to do financially when your husband dies lays out the full sequence. What a new widow should decide this year, and what should wait sorts the deadlines from the decisions that can sit, and filing taxes the first year as a widow covers the income tax return that runs alongside the estate return. Skipping this election is one of the quieter financial mistakes widows make, since nothing prompts the filing when no tax is due. If you are weighing whether to keep your husband’s financial advisor, whether the current team raised portability is a fair test. For the income tax side, see the Executive Woman’s Tax Playbook.
Frequently Asked Questions
Is portability automatic when a spouse dies?
No. Estate tax portability requires the deceased spouse’s executor to file a complete Form 706 on time, within 9 months of death, or 15 months if Form 4768 was filed by the 9-month date. A timely return elects portability unless the executor opts out on it. If no return is filed, no election is made, though the IRS offers late relief for some estates.
Can I elect portability after the 9-month deadline?
Possibly. Under the IRS relief procedure (Rev. Proc. 2022-32), an estate not otherwise required to file Form 706 can elect portability by filing a complete return by the fifth anniversary of the death, with the required statement at the top and no IRS user fee. Estates that were required to file cannot use it. An estate under the threshold that missed the 5-year window may request a private letter ruling.
Does remarrying cancel the DSUE amount?
Remarriage alone does not. The DSUE amount comes from your last deceased spouse, and a living new spouse does not change that, nor does a later divorce. If a new spouse dies before you, he becomes your last deceased spouse and his DSUE amount, possibly $0, replaces the first. DSUE already applied to your taxable gifts stays counted.
Can a surviving spouse use DSUE for lifetime gifts?
Yes. A surviving spouse with a DSUE amount is treated as using it on taxable gifts before her own exclusion. Gifting can lock in DSUE that could be lost if she remarries and outlives a second spouse, while preserving her own exclusion. Whether gifting fits depends on her cash flow and retirement plan.
Get the First-Year Checklist
Portability is one line on a longer first-year list, and the order matters. The one-page Widow’s First-Year Financial Checklist puts the decisions in sequence, from the deadlines that cannot move to the ones that can wait. Get the checklist here.
Hazel Secco, CFP®, CDFA®, is the founder of Align Financial Solutions, a fee-only fiduciary firm in Hoboken, New Jersey, that helps high-net-worth women bring retirement, equity compensation, tax, and estate planning into one plan. Learn how Align approaches financial planning for widows and financial planning for women. Align is based in Hoboken, NJ, but we work with clients across the country virtually.
Already past the research phase? Book a free 15-minute Align Call: https://alignfinancialsolutions.com/book-a-call/. Whether we work together or not, you’ll walk away with clarity on your best next step.
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Disclaimer: Advisory services are offered through Align Financial Solutions LLC (“AFS”), an Investment Advisor in the State of New Jersey. This article is for educational purposes only and does not constitute personalized tax, legal, investment, or financial planning advice. Align does not provide tax or legal advice. Rules and figures are current for 2026 and subject to change. All client scenarios are hypothetical composites for illustration and do not represent any specific client outcome. Consult your estate attorney and CPA about your specific situation.
Sources
- 26 U.S.C. § 2010, Unified credit against estate tax. https://www.law.cornell.edu/uscode/text/26/2010
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments). https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
- IRS, What’s new, Estate and gift tax. https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
- 26 CFR § 20.2010-2, Portability provisions applicable to estate of a decedent survived by a spouse. https://www.law.cornell.edu/cfr/text/26/20.2010-2
- 26 CFR § 20.2010-3, Portability provisions applicable to the surviving spouse’s estate. https://www.law.cornell.edu/cfr/text/26/20.2010-3
- 26 CFR § 25.2505-2, Gifts made by a surviving spouse having a DSUE amount available. https://www.law.cornell.edu/cfr/text/26/25.2505-2
- IRS, Rev. Proc. 2022-32. https://www.irs.gov/pub/irs-drop/rp-22-32.pdf
- IRS, Frequently asked questions on estate taxes. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-estate-taxes
- IRS, Instructions for Form 706 (Rev. July 2026). https://www.irs.gov/instructions/i706
- 26 U.S.C. § 2001, Imposition and rate of tax. https://www.law.cornell.edu/uscode/text/26/2001
- 26 U.S.C. § 2056, Bequests to surviving spouse. https://www.law.cornell.edu/uscode/text/26/2056
- Federal Register, Portability of a Deceased Spousal Unused Exclusion Amount (June 18, 2012). https://www.federalregister.gov/documents/2012/06/18/2012-14781/portability-of-a-deceased-spousal-unused-exclusion-amount
- New Jersey Division of Taxation, Inheritance and Estate Tax. https://www.nj.gov/treasury/taxation/inheritance-estate/inheritance.shtml
- New Jersey Division of Taxation, General Information, Inheritance and Estate Tax. https://www.nj.gov/treasury/taxation/pdf/other_forms/inheritance/o10c.pdf
- New York State Department of Taxation and Finance, Estate tax. https://www.tax.ny.gov/pit/estate/etidx.htm
- New York State, Instructions for Form ET-706. https://www.tax.ny.gov/pdf/current_forms/et/et706i.pdf
- N.Y. Tax Law § 952, Tax imposed. https://www.nysenate.gov/legislation/laws/TAX/952
- IRS, Rev. Proc. 2024-40 (2025 inflation adjustments). https://www.irs.gov/pub/irs-drop/rp-24-40.pdf