If the combined value of the couples’ estate at the first spouse’s death is less than the Federal exclusion amount, the surviving spouse and the other heirs of the estate are not likely to spend the time or money to prepare a Federal Form 706 to make the deceased spousal unused exclusion (DSUE) election.
From this perspective: If the filing of a federal estate tax return and a state estate tax return is not required, why waste the money? But such a decision may be shortsighted.
If the surviving spouse won the lottery, or was awarded a significant personal injury judgment, or experienced a significant wealth enhancement event, then the heirs may later regret that a portability election was not made.
Generally, there is no downside to making the portability election even for spouses with estates valued substantially less than the applicable estate exclusion amount. That is other than the cost of filing Form 706.
To discuss further please contact our office.