Wednesday, May 30, 2012

Estate tax exclusion now transfers to surviving spouse

The estate and gift tax for 2011/2012 is $5mil. If the first spouse dies in 2011/2012 and the estate is less than the exclusion, the estate can elect to transfer the unused exclusion to the surviving spouse with the form 706, timely filed within 9 months of date of death. The election cannot be made without filing a form 706 which technically is not necessary if you estate is less than $5mil and which is quite an extensive form. This would be worth doing if it was anticipated that the estate of the surviving spouse would be greater than $5mil at date of death.

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