Unlimited Marital Deduction

AAA

DEFINITION of 'Unlimited Marital Deduction'

A provision in United States Federal Estate and Gift Tax Law that allows an individual to transfer an unrestricted amount of assets to his or her spouse at any time, including at the death of the transferor, free from tax. The unlimited marital deduction is considered an estate preservation tool because assets can be distributed to surviving spouses without incurring estate or gift tax liabilities.

INVESTOPEDIA EXPLAINS 'Unlimited Marital Deduction'

Any asset that is transferred to a surviving spouse can be included in the spouse's taxable estate unless it is spent or gifted during the surviving spouse's lifetime. Alternatively, if the surviving spouse remarries, the unlimited marital deduction may allow the assets to pass to his or her surviving spouse without the application of estate and/or gift taxes. In some situations less taxes will be paid by using other estate planning methods such as using exemptions or trusts.


The unlimited marital deduction applies only to surviving spouses that are United States citizens. A qualified domestic trust (or QDOT) may be obtained to provide unlimited marital deductions for non-qualified spouses.

RELATED TERMS
  1. Gift Tax Return

    A federal tax form that must be filled out by any individual ...
  2. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  3. Gift Tax

    A federal tax applied to an individual giving anything of value ...
  4. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  5. Marital Deduction

    A tax deduction that allows an individual to transfer some assets ...
  6. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
RELATED FAQS
  1. Can I get a tax credit from conducting research and development?

    It is possible for a company to qualify for a research and development tax credit for conducting research and development. ... Read Full Answer >>
  2. What is the government's role and what is the private sector's role in neoliberalism?

    Neoliberalist economic theory supports minimization of government intervention and laissez-faire policy. Neoliberalism is ... Read Full Answer >>
  3. What tax implications are there for parties involved with a reverse repurchase agreement?

    A reverse repurchase agreement – sometimes referred to as a reverse repo – is the purchase of an asset with a simultaneous ... Read Full Answer >>
  4. How are benefits from a provident fund taxed?

    Not all provident fund benefits are treated equally, even in the same country. Thailand, for instance, has three separate ... Read Full Answer >>
  5. How does a qualifying widow obtain widow's allowance?

    The requirements that a widow must meet to obtain a widow's allowance include having a child who is claimed as a dependent ... Read Full Answer >>
  6. What is an IRS letter audit / audit by correspondence?

    Every year, the Internal Revenue Service (IRS) sends numerous notices to taxpayers. Letter audit, or audit by correspondence, ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  2. Retirement

    Refusing An Inheritance

    Contrary to popular belief, inheriting assets isn't always a good thing. Find out what to do if you want to disclaim them.
  3. Taxes

    Have Household Help? Don't Get In Tax Trouble

    Hiring household workers can be a complicated process. Know what the government requires so you can prevent penalties and problems down the road.
  4. Taxes

    Estate Planning for a Surviving Spouse

    Estate planning for surviving spouses can be difficult for a number of reasons, so it's important to have good support and financial advice.
  5. Professionals

    Gay Marriage Ruling: Its Impact on Estate Planning

    Same-sex couples now face the same legal and financial issues as heterosexual couples; some may need to adopt simpler, more mainstream financial plans.
  6. Taxes

    What is an Ad Valorem Tax?

    An ad valorem tax is a levy placed on real or personal property based on the assessed value of that property.
  7. Retirement

    Does it Make Sense to Have an MLP in an IRA?

    Here's why MLPs should — and shouldn't — be considered for an IRA.
  8. Entrepreneurship

    MLPs: How They Are Taxed

    The advantages of MLPs outweigh the disadvantages, especially if you play your cards right.
  9. Mutual Funds & ETFs

    Pros and Cons of Master Limited Partnerships

    Want steady income? Consider looking into MLPs.
  10. Taxes

    Do You Need Umbrella Insurance For Household Help?

    Homeowners insurance may not be enough – say, if your nanny sues for damages after an accident. That's where umbrella coverage comes in.

You May Also Like

Hot Definitions
  1. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  2. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  3. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  4. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  5. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  6. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!