What Married Couples Should Know About the Federal Estate Tax

You and your spouse are a team. Financially, you view yourselves as a single unit. You pay your bills together, you pool your savings, and you make gifts and charitable contributions as a couple.

And Your Estate Tax Exclusions Can Also Be Connected

Your estate is yours and yours alone. Your spouse has his or her own estate. However, federal law allows a surviving spouse to use any portion of his or her spouse’s estate tax that was unused in the first spouse’s estate.

Here’s an example of how this works. In 2015, the estate tax exemption is $5.43 million. That means that an individual can pass $5.43 million in assets through his or her estate without having to pay federal estate taxes. If one spouse dies in January 2015 and has an estate that is worth $3.43 million, than that spouse’s estate does not have to pay any estate tax because her estate is worth less than $5.43 million. If the other spouse dies later in 2015 while the estate tax exemption is still $5.43 million then that spouse can use both the $5.43 million estate tax exemption that he has and the portion that his spouse did not use when she passed away. Thus, for this example, the first spouse had $2 million worth of federal estate tax exemption that she did not use and the estate of the second spouse would not incur estate taxes unless his estate was worth more than $7.43 million.

As you and your spouse create your estate plans it is important to keep in mind how the estate tax may affect you both separately and together. For more information about this, please start a live chat with us today.


James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm
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