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.
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.
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.
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The One Big Beautiful Bill Act permanently raised the estate and gift tax exemption to $15 million per person and repealed the scheduled sunset.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.
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. It can be lost if the surviving spouse remarries and that subsequent spouse predeceases them.