Federal estate tax rules for spouses

In 2023, the exemption amount is $12.92 million, adjusted for inflation annually.

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Points to know

  • The unlimited marital deduction allows one spouse to transfer any amount of assets to the surviving spouse free of federal estate tax if the surviving spouse is a U.S. citizen.
  • As of 2023, U.S. citizens are entitled to transfer $12.92 million, known as the exemption amount, free of federal estate and gift taxes. Spouses can transfer any unused portion of their exemption amount to their surviving spouse.

The relationship between marriage and taxes

Federal tax laws are less intrusive when assets pass from one spouse to the other.

Unlimited marital deduction

The unlimited marital deduction allows you to transfer any amount of assets to your surviving spouse free of federal estate tax if your spouse is a U.S. citizen.

If your spouse isn't a U.S. citizen, you can take advantage of the marital deduction by creating a qualified domestic trust.

 

Portability

Portability is the ability to transfer the unused portion of your exemption amount to your surviving spouse. This transferred amount is known as the "deceased spousal unused exclusion amount" (DSUEA), and it's added to your spouse's exemption amount.

To make the transfer, your executor must elect this option on your federal estate tax return.

Exemption amount

The amount of money U.S. citizens are entitled to transfer free of federal estate and gift taxes.

Executor

The person or entity named in a will and appointed by the probate court responsible for gathering an individual's assets upon his or her death, managing and maintaining those assets, completing the administrative and tax responsibilities of the estate, and distributing assets according to the decedent's will.

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✓ Custom financial plan

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✓ Investment coaching

✓ Real-time goal tracking

✓ All at a low cost

 

Reach your goals with advice from Vanguard

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Understanding how taxes affect your estate

Learn about the taxes that could affect your estate and the amount your heirs receive.

Learn more about estate taxes

Strategies to lower your taxable estate now

Transferring assets during your lifetime can lower your taxable estate, meaning your heirs will pay less in taxes.

Reduce your estate tax burden

Vanguard family legacy services

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Vanguard family legacy services

We're here to help. Talk with your Vanguard team.

Call 866-226-2759

View your account or schedule time to talk with your relationship team.

Log in

We recommend that you consult a tax or financial advisor about your individual situation. 

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