The Portability Deadline Most Families Miss — And What It Costs Them

What is the DSUE?

When a married person dies with an estate below the federal exemption ($15 million in 2026), their unused exemption doesn't simply disappear. Under the portability rules, the surviving spouse can inherit that unused amount — called the Deceased Spousal Unused Exclusion, or DSUE — and add it to their own exemption.

A couple where each spouse has a $15 million exemption can, with proper planning, shield up to $30 million from federal estate tax. But the surviving spouse only gets access to the deceased spouse's unused exemption if the executor files a timely Form 706.

The catch: you have to file to elect it

Portability is not automatic. The executor of the deceased spouse's estate must file a Form 706 — the federal estate tax return — within nine months of the date of death (or 15 months with an extension). This is required even if the estate owes absolutely no estate tax.

Most families don't know this. Their advisor or attorney may not mention it if the estate is clearly below the filing threshold. The return gets skipped, the deadline passes, and the DSUE is permanently lost.

What it costs

If the DSUE is lost and the surviving spouse later dies with an estate that would have been covered by the combined exemption, the estate may owe federal estate tax that could have been avoided entirely. At the current 40% estate tax rate, the cost of a missed portability election can be significant.

Late portability relief

The IRS has provided relief procedures for late portability elections in certain circumstances — specifically, estates that were not otherwise required to file a Form 706. This relief has historically been available for up to five years after the date of death. However, it is not guaranteed, requires a formal filing, and costs time and professional fees that a timely election would have avoided.

What to do

If a spouse passed away recently and no Form 706 was filed, the first step is determining whether the portability deadline has passed and whether late relief is still available. If the deadline is approaching, filing — even a simple portability-only 706 — should be prioritized immediately.

We handle portability elections as part of our estate tax practice and can assess the situation and deadline on short notice.