Section 31-11-7-5 - Portability agreement and portability election; obligation of surviving spouse or the personal representative of deceased spouse; petition for special administrator(a) The following definitions apply throughout this section:(1) "Deceased spouse" means the first member of a married couple to die.(2) "DSUE amount" means "deceased spousal unused exclusion amount" as defined under Section 2010(c)(4) of the Internal Revenue Code, for federal estate tax and federal gift tax purposes, for a married individual who dies and is survived by a spouse.(3) "Internal Revenue Code" means the Internal Revenue Code of 1986 as amended and applicable United States Department of Treasury regulations.(4) "Portability agreement" means an executed premarital agreement or postmarital agreement under which a personal representative of the deceased spouse shall make a portability election after the death of that spouse and for the benefit of the surviving spouse.(5) "Portability election" means an election by the personal representative of a deceased spouse, under Section 2010(c)(5) of the Internal Revenue Code, to effectively transfer a DSUE amount to a surviving spouse for federal estate tax and federal gift tax purposes.(6) "Postmarital agreement" means a written agreement between two (2) spouses that is executed: (A) after the spouses have entered into the marriage; and(B) while the spouses are married to one another.(7) "Premarital agreement" has the meaning set forth in IC 31-11-3-2.(b) In order to permit a surviving spouse and the estate of a deceased spouse to timely comply with federal estate tax and federal gift tax reporting obligations, time is of the essence for performance of either party's obligations under a portability agreement and Section 2010(c)(5) of the Internal Revenue Code.(c) A portability agreement is enforceable and effective according to its terms and is binding on the: (2) spouses' heirs, legatees, personal representatives, and other successors in interest; without additional or separate consideration and without regard to the validity of other provisions in the same premarital agreement or postmarital agreement. The obligation of the deceased spouse's personal representative or other successor in interest to make a timely portability election is severable from any provision in a premarital agreement or postmarital agreement that is challenged or invalidated.
(d) A portability agreement becomes effective upon the death of a deceased spouse and remains effective and enforceable until the conclusion of the federal gift tax and federal estate tax proceedings of the surviving spouse.(e) A surviving spouse may petition for the appointment of a special administrator under IC 29-1-10-15 to perform any obligation of the deceased spouse or the deceased spouse's successors in interest under a portability agreement, including: (1) filing a federal estate tax for the deceased spouse;(2) taking any action required to make a portability election; and(3) obtaining information and documents to confirm the DSUE amount.(f) If the estate of the deceased spouse is not otherwise required to file a federal estate tax return, then the surviving spouse shall, subject to the terms of a premarital agreement or postmarital agreement that contains a portability agreement, pay the reasonable costs and expenses associated with:(1) preparing and filing the federal estate tax return and making the portability election for the deceased spouse; and(2) determining the correct DSUE amount that was effectively transferred to the surviving spouse.(g) After a portability election is made, the personal representative, surviving spouse, and any successors in interest have a continuing obligation to promptly exchange material documents and information necessary to cooperate and comply with an audit or examination by the Internal Revenue Service concerning: (1) the federal estate tax return filed for the deceased spouse; or(2) any federal gift tax return or federal estate tax return filed for the surviving spouse, during the surviving spouse's lifetime or after the surviving spouse's death. This subsection applies regardless of whether the portability agreement contained an obligation to exchange the documents and materials described in this subsection.
(h) If the terms of a valid executed portability agreement conflict with this section the terms of a portability agreement control.(i) Except as provided in subsection (j), if a surviving spouse remarries after the death of the deceased spouse, the parties' obligations under a portability agreement executed between the surviving spouse and the deceased spouse remain in full effect.(j) If a surviving spouse remarries after the deceased spouse's death and the new spouse also predeceases the surviving spouse, a DSUE amount from the previously deceased spouse is effectively zero (0) under Section 2010(c)(4)(B) of the Internal Revenue Code, except to the extent that the surviving spouse has used part of the earlier deceased spouse's DSUE amount with respect to a lifetime gift made by the surviving spouse before the death of the immediately predeceased spouse.Added by P.L. 38-2023,SEC. 21, eff. 7/1/2023.