G.60 Marital deduction Flashcards

A provision in U.S. tax law that allows unlimited transfers of assets between spouses at death or during life without incurring federal estate or gift taxes.

The rule that allows a spouse to transfer an unlimited amount of assets to their U.S. citizen spouse tax-free, deferring estate taxes until the surviving spouse’s death.

A trust designed to allow non-U.S. citizen spouses to qualify for the marital deduction, requiring a U.S. trustee and restrictions on principal distributions.

A limitation on the marital deduction where certain property interests that do not grant full control or ownership to the surviving spouse do not qualify for the deduction.

A provision allowing the unused portion of a deceased spouse’s estate tax exemption to be transferred to the surviving spouse, maximizing tax-free wealth transfer.

A tax strategy that allows spouses to combine their individual annual gift tax exclusions, effectively doubling the amount that can be gifted tax-free to a third party.

An irrevocable trust established by one spouse for the benefit of the other, allowing tax-free asset transfers while keeping assets outside the taxable estate.

A simple estate planning method where assets are directly transferred to the surviving spouse, qualifying for the marital deduction without additional trust structures.

The ability to postpone estate taxes until the surviving spouse’s death by using the marital deduction, after which estate taxes may apply on remaining assets

Gifts made during a spouse’s lifetime that qualify for the marital deduction, reducing the taxable estate while maintaining tax-free transfers between spouses.