Portability election on Texas estate

by | Jan 1, 2014 | Estate Administration |

An estate owner can opt out of portability election. There are certain ways in which to carry this act out. In an instance where a tax return for an estate is not required, it will be considered as a choice to not participate in portability election under a specified Internal Revenue Code. If an estate tax return is filed, then the Texas executor must submit a confirmatory statement to remove portability election.

Only the executor of the estate is allowed to file tax returns or make any elections on the estate, and the executor is someone who is appointed or is the administrator of the estate. In a situation of a surviving spouse, if they intend to file, then it’s required to submit notification to the appointed executor of their intentions. This can only be done if the executor has not already filed a return.

If there is no appointed executor, then a non-appointed executor is one that is currently in possession of property of the estate. Sometimes, a non-appointed executor may want to enact the portability rule, and, in that case, the executor is required to accurately and timely file a tax return on the estate. In a situation where there are two non-appointed executors, one cannot override the other when making elections.

Without some form of estate plan, including wills and trusts, the state may take over the estate and distribute assets how it sees fit — rather than according to a person’s desires. In addition, beneficiaries stand to gain even more when the tax penalties are low or non-existent. Sitting down with someone who is knowledgeable about estate planning details can help individuals learn more about portability elections. Texas residents may wish to fully research all of their options to ensure their estate plans are prepared in an accurate and legally binding manner.

Source: Forbes, Estate Tax Portability, Lewis Saret, Dec. 31, 2013