The Filing Most Widows Miss: Portability and the Estate Tax Return Nobody Told You to File

What Is the Portability Election?

Portability lets a surviving spouse inherit whatever federal estate tax exemption the deceased spouse didn't use — the “deceased spousal unused exclusion,” or DSUE. With the exemption at $15 million per person in 2026, a full election can give the survivor up to $30 million of combined shelter.

The catch: it is not automatic. The executor must file Form 706 — the federal estate tax return — even when the estate owes nothing and would otherwise have no filing requirement. No filing, no DSUE. The first spouse's exemption simply evaporates.

Why Would I File If the Estate Owes Nothing?

Because the exemption you're preserving protects the survivor's future estate, not the first estate. The survivor typically inherits everything, then lives another ten or twenty years of compounding — portfolio growth, home appreciation, maybe an inheritance or a business sale of their own.

A hypothetical: a widow inherits a combined $9 million estate. No federal tax at the first death, so no return is filed. Twenty years later the estate is $22 million. Her single $15 million exemption (plus inflation adjustments) leaves millions exposed at 40% — exposure a one-time filing would have eliminated. The “permanent” $15 million exemption also carries no guarantee against future legislation, which makes banking the DSUE cheap insurance.

Two technical notes worth knowing: the GST exemption is not portable, and remarriage changes the math — DSUE comes from the last deceased spouse.

What Are the Deadlines — and the Second Chance?

The standard deadline is nine months after death, extendable six months. But the IRS opened a wide relief window: under Rev. Proc. 2022-32, an estate that wasn't otherwise required to file can make a late portability election by filing a complete Form 706 up to the fifth anniversary of death, with “FILED PURSUANT TO REV. PROC. 2022-32 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)” stated at the top. No user fee, no ruling request.

Past five years, the only path is a private letter ruling — expensive, slow, and not guaranteed. If you lost a spouse within the last five years and nobody filed a 706, this is worth a conversation this month, not this year.

What Should a Surviving Spouse Actually Do?

1. Confirm whether a Form 706 was filed at your spouse's death. Your estate attorney or CPA will know; so will your own records.
2. If not filed and the death was within five years, evaluate the Rev. Proc. 2022-32 election with your attorney — the estate must not have been large enough to require a return.
3. Keep the valuation workpapers. The burden of proving the DSUE stays with you and your estate; the return alone isn't enough.
4. If you're married and planning now: make the portability filing a required duty of the executor in your documents, so nobody has to remember during the worst year of their life.