The marital deduction is a key tool for generating estate and gift tax savings for family units. Property eligible for the marital deduction can completely escape estate tax in the estate of the first of the spouses to die. To take advantage of the deduction, both the property and transfer will need to meet the marital deduction requirements.

The marital deduction is an unlimited estate and gift tax deduction for transfers made during life or at death to a spouse. For example, if an individual were to convey by will an entire estate to a surviving spouse, the decedent’s estate would have no estate tax liability. The marital deduction is effectively a deferral of the estate tax to the date of the surviving spouse’s death. This deferral can present an opportunity to accumulate funds and to create estate planning opportunities for the surviving spouse. It allows for the time and use of funds for the duration of his or her life and provides opportunities for saving estate taxes.

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