The surviving spouse can use any portion of the $5,000,000 exemption not used by the first spouse to die.

• A. Unified Credit
• B. Credit Shelter Trust
• C. Portable
• D. Tax-Wise Will

Answer: (C)

Portability of the federal estate tax exemption between spouses. When the first spouse dies, any unused portion of the exemption can be carried over to the surviving spouse, allowing the survivor to apply that unused amount to their own estate tax exemption at death. This is why the statement about using any portion not used by the first spouse to die describes portability—the surviving spouse can shelter more assets from estate tax by using the deceased spouse’s unused exclusion (DSUE). In practice, an election is typically needed on an estate tax return to make portability effective.

The other options describe related ideas but not the mechanism at issue: the unified credit is the general tax credit against transfer taxes, rather than the transfer of unused exemption; a credit shelter trust (bypass trust) uses the deceased spouse’s exemption inside a trust to shelter assets from the survivor’s estate; and a tax-wise will refers to strategies to minimize taxes but not the specific transfer of unused exemption.