DSUE & the
Portability Election
The Deceased Spousal Unused Exclusion can be worth millions — but only if Form 706 is filed on time. Many families lose this benefit simply because no one told them it existed.
What is the DSUE?
The Deceased Spousal Unused Exclusion (DSUE) is the portion of a deceased spouse's federal estate tax exemption that was not used at their death. Under the portability rules, a surviving spouse can add this unused amount to their own exemption — effectively compounding the protection available to the combined estate.
With the 2026 federal exemption at $15,000,000 per person, a surviving spouse who captures their deceased spouse's full DSUE could have up to $30 million in combined exemption — sheltering a substantial estate from federal estate tax entirely.
The catch — you have to file Form 706 to claim it
Portability is not automatic. To elect portability and preserve the DSUE, the executor must file a timely Form 706 — the federal estate tax return — even if the estate owes absolutely no estate tax. If no Form 706 is filed, the DSUE is permanently lost.
This is one of the most costly mistakes in estate administration — and it happens constantly, because families and sometimes advisors don't realize a 706 is required when no tax is owed. The return isn't being filed to pay tax. It's being filed to preserve an election.
The deadline
Form 706 for portability must be filed within nine months of the date of death. A six-month extension is available, extending the deadline to fifteen months. After that, the election is generally lost — although the IRS has provided late relief procedures in certain circumstances, which we can evaluate case by case.
The exemption is now permanent
The One Big Beautiful Bill Act permanently raised the estate and gift tax exemption to $15 million per person and repealed the scheduled sunset. Portability is now a planning tool that works against this higher permanent exemption — making it more valuable, not less.
How the DSUE is used
The DSUE is added to the surviving spouse's own exemption and used to offset transfers — either during lifetime (as a gift) or at death. Only the DSUE from the last deceased spouse is available — if the surviving spouse remarries and the new spouse later dies, the original DSUE is replaced by the new spouse's unused exemption.
What we need to get started
- Date of death and full legal name of the deceased spouse
- Approximate value of all assets in the estate
- Will and trust documents
- Prior gift tax returns (Form 709) filed during lifetime
- Information on the surviving spouse
- State of domicile
Frequently Asked Questions
What is the DSUE?
The Deceased Spousal Unused Exclusion is the portion of a deceased spouse's federal estate tax exemption that wasn't used by their estate. Under portability rules, this unused amount can be transferred to the surviving spouse — but only if a timely Form 706 is filed.
Is portability automatic?
No. The executor must file Form 706 within nine months of death (or 15 months with an extension) to elect portability. Without the filing, the unused exemption is permanently lost — even if no estate tax is owed.
Can the surviving spouse remarry and keep the DSUE?
Yes, but only the DSUE from the last deceased spouse is available. If the surviving spouse remarries and the new spouse later dies, only the new spouse's unused exemption carries over — the original DSUE is replaced.