Loss of a Spouse

What is a post-mortem election?

A post-mortem ("after death") election is an estate planning technique that can help minimize federal transfer tax or income tax liabilities. Post-mortem elections are usually made by an estate's personal representative. Each election must be timely made in the required fashion.

Types of Post-Mortem Elections

Transfer-tax-related elections

Disclaimers*

A disclaimer is a refusal to accept a gift, bequest, or other form of property transfer. This allows the beneficiaries to redistribute estate property without incurring transfer taxes on the redistribution.

The alternative valuation date

Assets in an estate are generally valued on the date of death. By electing the alternative valuation date, the assets in an estate that qualifies are valued either (1) six months after the date of death or (2) as of the date the asset is disposed of. This is advantageous if assets depreciate after death.

QTIP election

With a QTIP election, all or a portion of the assets that qualify for treatment as qualified terminable interest property (QTIP) pass free from estate tax under the unlimited marital deduction.

Income-tax-related election

Selection of fiscal year

The election of the tax year (either fiscal or calendar) for an estate allows the personal representative to divide income into as many taxable years as possible, prevent bunching of income in the first taxable year, or otherwise adopt the taxable year that results in minimizing the tax costs as much as possible.

Note: Business owners have additional post-mortem elections available to them.

*Though not technically an election, disclaimers are an important post-mortem planning tool.