The $1.5 Million Estate Planning Mistake Every Married Couple Must Avoid
Estate planning is one of the most important, yet often overlooked, parts of protecting your family’s future. While it can seem complicated—or even intimidating—understanding key rules can mean the difference between preserving your wealth for your loved ones and watching a large portion of it disappear to taxes.
A recent real-world case involving businessman and grandfather Billy Rowland is a powerful example. After his death, his heirs were hit with a shocking $1.5 million estate tax bill—a tax that could have been completely avoided.
The Critical Mistake: Ignoring Portability
The reason for the unexpected tax bill came down to one overlooked detail: the portability election. Portability is a valuable estate tax provision that allows a surviving spouse to use any unused federal estate tax exclusion from their deceased spouse.
Current Estate Tax Limits
- In 2025, the federal estate tax exclusion is $13.99 million per person.
- Married couples can protect almost $28 million combined from federal estate taxes—but only if portability is properly elected.
Why Portability Isn’t Automatic
Many people assume that if their estate is under the threshold, no action is needed. That’s a costly assumption. The IRS requires the executor of the first spouse’s estate to file a timely and properly completed estate tax return—even if no tax is due at the time—to “port” the unused exclusion to the surviving spouse.
In the Rowland case, no estate tax return was filed after his wife’s death. As a result, Billy’s estate could not use her unused exclusion, leading directly to the $1.5 million tax bill.
Key Lessons for Married Couples
1. Don’t Assume You’re Safe
Even if your estate is far below the current exemption, future changes in law—or an unexpected increase in asset value—could push your estate into taxable territory.
2. File the Return Anyway
The cost of filing an estate tax return is small compared to the millions in potential tax savings.
3. Work With Professionals
Estate planning attorneys and CPAs ensure every box is checked and every form is filed correctly. DIY estate planning is risky.
4. Plan Together
Estate planning should be a joint process. Both spouses should understand the family’s assets, the plan in place, and the critical steps to protect their heirs.
Why This Matters Even More in 2025
The current generous estate tax exclusion is scheduled to drop significantly after 2025. More families—especially those with real estate, investments, and life insurance payouts—could face estate taxes. That makes the portability election more relevant than ever.
Bottom Line
The Rowland case is a stark reminder that one missed form can cost your family millions. The takeaway? Talk to your spouse about your estate plan today. Consult a qualified professional, and make sure that if one of you passes away, the portability election is filed correctly. It’s one of the most valuable gifts you can leave your family.
FAQ: Estate Planning & Portability
Q: What is the portability election?
A: It’s an IRS provision allowing a surviving spouse to use any unused federal estate tax exclusion from their deceased spouse, effectively doubling the amount exempt from estate taxes.
Q: Do I need to file an estate tax return if no taxes are due?
A: Yes. To claim portability, you must file a federal estate tax return even if the estate is under the threshold.
Q: How long do I have to file for portability?
A: Generally, the estate tax return must be filed within nine months of the first spouse’s death, though a six-month extension is possible.
Q: What happens if I miss the deadline?
A: Without a timely election, you lose the ability to transfer the unused exclusion, which could result in a significant tax bill later.
Q: Will the estate tax threshold change in the future?
A: Yes. The current high exclusion amount is scheduled to drop after 2025, potentially making more estates subject to tax.
