Estates, Gifts, And Trusts (EGT)

Estate Tax Marital Deduction (Portfolio 843)

  • The Portfolio, Estate Tax Marital Deduction, presents a detailed study of the marital deduction under the federal wealth transfer tax laws.


Bloomberg Tax Portfolio, Estate Tax Marital Deduction, No. 843, presents a detailed study of the marital deduction under the federal wealth transfer tax laws. It analyzes practical and tax advantages of using the marital deduction (as well as its potential pitfalls), including issues raised in planning, qualification, funding, and administering a marital bequest.

Section 2056 grants an unlimited federal estate tax marital deduction for qualifying dispositions of property to or for the benefit of a decedent’s surviving spouse. The estate tax marital deduction, together with the §2523 unlimited federal gift tax marital deduction for qualifying lifetime transfers, provides the most powerful estate planning tool available for married individuals. Through optimum use of the marital deduction, all federal wealth transfer taxes can be deferred until the surviving spouse’s death, regardless of the size of the estate of the first spouse to die.

The Portfolio explores the following questions that the estate planner must answer in formulating and funding a marital bequest: How much marital deduction is appropriate and what role should portability of the unused exclusion amount play? Which of the many forms of qualifying disposition is preferable? How should a clause be drafted to qualify the preferred disposition for the marital deduction? Which of the eight available alternatives for funding the marital bequest should be used to segregate the marital bequest from the rest of the decedent’s property and transfer it to the dispositive vehicle chosen? Further, the special requirements for bequests to spouses who are not U.S. citizens also are examined.

This Portfolio may be cited as Pennell, 843 T.M., Estate Tax Marital Deduction.

Table of Contents

I. Introduction
II. Basic Marital Deduction Planning
III. Planning and Drafting for Larger Estates
IV. Specialized Situations That Affect Proper Size of Marital Bequests
V. Marital Deduction Transfers: Qualification Requirements
VI. Marital Deduction Transfers: Forms of Dispositions
VII. Selecting and Drafting Marital Deduction Trusts
VIII. Funding Marital Deduction Transfers
IX. Planning in Contemplation of Divorce
X. Planning in Contemplation of Marriage
XI. Ethics Considerations
XII. Planning for Unmarried Cohabitants

Jeffrey Pennell
Jeffrey Pennell
Professor of Law
Emory University School of Law
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