MARITAL DEDUCTION TRUST
Back to GlossaryDefinition
A trust established to receive an amount on behalf of the surviving spouse that qualifies for the marital deduction
Summary
A Marital Deduction Trust is a special type of trust created as part of estate planning that allows a deceased spouse to transfer assets to their surviving spouse without triggering federal estate taxes. This trust takes advantage of the unlimited marital deduction provision in tax law, which permits tax-free transfers between spouses. The trust holds assets for the benefit of the surviving spouse while potentially providing additional benefits like asset protection or control over ultimate distribution of the assets.
Usage Context
This term is crucial when studying estate planning strategies, understanding how married couples can minimize estate taxes, and learning about different trust structures used in wealth transfer planning.
Common Confusions
- Thinking all marital trusts automatically qualify for the marital deduction
- Confusing marital deduction trusts with bypass trusts, which serve opposite purposes
- Believing the surviving spouse always has complete control over trust assets
- Assuming marital deduction trusts provide asset protection benefits
- Thinking the marital deduction eliminates all estate tax consequences permanently
