§ 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:
(1) spouses; and
(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.

Legislative History

As added by P.L.38-2023, SEC.21.