Unlimited Marital Deduction

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.

BREAKING DOWN '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. Marital Trust

    A fiduciary relationship between a trustor and trustee for the ...
  2. Marital Deduction

    A tax deduction that allows an individual to transfer some assets ...
  3. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  4. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  5. Form 8857: Request For Innocent ...

    An IRS tax form used by taxpayers to request relief from a tax ...
  6. Qualifying Domestic Trust - QDOT

    A type of trust that allows taxpayers who are not U.S. citizens ...
Related Articles
  1. Professionals

    Introduction

    Introduction
  2. Professionals

    Marital Deduction and Bypass Trust Planning

    Marital Deduction and Bypass Trust Planning
  3. Retirement

    Estate Planning: Marital And Non-Marital Trusts

    by Cathy Pareto, CFP®, AIF® (Contact Author | Biography) Before we begin talking about these types of trusts, let's first begin by introducing the term "unlimited marital deduction." ...
  4. Professionals

    Specialized Returns For Individuals

    Describes exam topics related to estate and gift taxes.
  5. Professionals

    Requirements & Qualifying Transfers

    Requirements & Qualifying Transfers
  6. Professionals

    Answer Key

    Answer Key
  7. Professionals

    Qualified Domestic Trust

    Qualified Domestic Trust
  8. Professionals

    Terminable Interest Rule and Exceptions

    Terminable Interest Rule and Exceptions
  9. Professionals

    Adjusted Gross Estate

    Adjusted Gross Estate
  10. Professionals

    Answer Key

    Answer Key
RELATED FAQS
  1. How can a trust lower federal transfer tax liability?

    A trust is an arrangement in which an individual or entity controls property or funds on behalf of someone else without actually ... Read Answer >>
  2. How do I roll over a spousal IRA?

    To roll over a spousal IRA, the surviving spouse can transfer the remaining funds from the deceased spouse's investing IRA ... Read Answer >>
  3. I've heard that workers who don't roll over their 401(k)s after retiring face some ...

    I am not sure to which government regulation your contact was referring. However, here is what I can tell you. In 2002, the ... Read Answer >>
  4. All of the following are allowable deductions used in determining taxable estate ...

    A. funeral expenses. B. debts owed at time of death.C. gift tax credit used during life.D. the value of property that passes ... Read Answer >>
  5. Are estate planning fees tax deductible?

    The costs of estate planning can be significant. Are any of these expenses deductible to the taxpayer or are they merely ... Read Answer >>
  6. If an individual still has his or her former spouse as the beneficiary of an IRA, ...

    It depends. Generally, divorce does not effectively change a beneficiary designation unless the divorce decree makes a stipulation ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center