Estate PlanninG

Marital Deduction

For married couples, understanding how the marital deduction works is very important for tax and estate planning.

The marital deduction provides for unlimited tax-free transfers between spouses during life and after death. The deduction allows you to give assets to your spouse while reducing or eliminating taxes.

The marital deduction includes the entire value of property that is part of your gross estate that you can be transferred to your spouse.

To qualify for the marital deduction, you need the following requirements:

  1. The decedent has to be a surviving spouse;
  2. The property must pass from the decedent to the surviving spouse;
  3. The property is part of the decedent’s gross estate; and
  4. The property is transferred outright and not as a life estate.

Finally, the marital deduction applies to either gift or estate taxes. Yes! The above rules also apply to gift giving between spouses.

The gift can be given to your spouse outright or held in trust. Your spouse must have the right to the income for life and have a general power of appointment over the property.

The experienced attorneys at Santaella Legal Group, APC in San Ramon, CA and throughout the east bay, can help you take advantage of these tax savings in your gift and estate planning.