Marital exemption — portability
An unlimited marital deduction allows you to leave all or part of your assets to your surviving spouse free of federal estate tax. Portability may allow the first spouse that dies to effectively transfer his or her unused estate tax applicable exclusion amount to the surviving spouse who can then use it for his or her gift or estate tax purposes.
In 2023, each spouse has his or her own estate tax exemption of $12,920,000. Using portability, couples may have assets up to $25,840,000 without owing federal estate tax. To use "portability" you have to elect it on the estate tax return of the first spouse to die, even when no tax is due.
Staying aware of estate tax changes and working with your attorney and tax advisor are important to those attempting to keep their taxable estate below the threshold and avoid the 40% federal estate tax.
2023 Federal Estate Tax Applicable Exclusion Amount
$12,920,000 Exemption Per Person
40% Federal Estate Tax Maximum Rate
2023 Annual Gift Tax Exclusion
$34,000 Married Couple
Annual gift tax exclusion — You may give as much as $17,000 per year to any number of individuals without incurring federal gift tax and without having to file a gift tax return. If your spouse consents to the gift, you can give up to $34,000 to each individual, without incurring federal gift tax, but a gift tax return must be filed.
This information is provided as a guide only. It is not intended to constitute tax or legal advice. This chart represents State Farm's understanding of the tax laws in effect on the printing date. You should contact your qualified tax advisor for specific advice.
Neither State Farm® nor its agents provide tax or legal advice.
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