Portability: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

Portability lets a surviving spouse use the unused federal estate tax exemption of the spouse who died first. It isn’t automatic. The executor of the first spouse’s estate has to elect it on a timely federal estate tax return, even when no tax is owed on that estate.

How it works in California

Portability is a creature of federal law, not California law, so it works the same way here as anywhere else. See how portability plays out for California couples for the fuller picture. Under 26 U.S.C. § 2010(c)(2)(B) and (c)(4), a surviving spouse’s exclusion includes the deceased spouse’s unused exclusion amount.

Section 2010(c)(5)(A) allows that only if the executor elects it on a timely filed federal estate tax return. Miss that window under the general rule and the election is gone.

The IRS built in a backstop. Rev. Proc. 2022-32 lets an estate that was not otherwise required to file a federal estate tax return, and missed the deadline, make a simplified late portability election, as long as it files within five years of the date of death. After that window closes, reviving the election generally requires a private letter ruling, and that process is slower and less certain.

Why it matters

Portability only helps if someone elects it, and a lot of estates never do because no return was otherwise required. For example, a surviving spouse whose late husband’s estate looked well under the filing threshold might assume there’s nothing to file. If no one elects portability on a timely, or five-year simplified-late, return, the survivor’s own estate later loses the benefit of the first spouse’s unused exemption, for good.

Common mistakes

Assuming portability happens automatically because a spouse died. Skipping the estate tax return because the estate owes no tax, without realizing the return itself is what elects portability. Confusing portability with the generation-skipping transfer tax exemption, which doesn’t carry over between spouses the same way.

Related terms

• Marital Deduction: the marital deduction and portability are both tools for deferring or reducing estate tax at the first spouse’s death.
• Bypass Trust (AB Trust): older plans used a bypass trust to preserve the first spouse’s exemption before portability existed as an alternative.
• Generation-Skipping Transfer Tax: the GST exemption is separate from portability and isn’t transferable between spouses.

Part of the California estate planning glossary. For the full treatment, see Estate Tax Portability in California: The 706 Most Families Skip. For current federal and California figures, see California Estate Planning Numbers 2026: Probate, Estate Tax, and Medi-Cal Limits.