UNLIMITED MARITAL TRUST
Back to GlossaryDefinition
A trust set up for the benefit of the surviving spouse, who receives the net income plus whatever principal he or she desires, and over which he or she may have a general power of appointment.
Summary
An Unlimited Marital Trust is a special estate planning tool that allows a deceased spouse to leave assets to their surviving spouse in a tax-efficient way. The surviving spouse has complete control over the trust, receiving all income it generates and having the power to withdraw any amount of principal whenever they want. Additionally, the surviving spouse can decide who will receive the remaining trust assets after their death through what's called a 'general power of appointment.' This arrangement typically qualifies for the unlimited marital deduction, meaning no estate taxes are owed when the first spouse dies.
Usage Context
This term is crucial when studying estate planning strategies, particularly when learning about how married couples can minimize estate taxes through the unlimited marital deduction and various trust arrangements.
Common Confusions
- Confusing unlimited marital trusts with QTIP trusts, which give the surviving spouse less control
- Thinking the trust assets avoid estate tax entirely (they're only deferred until the second spouse dies)
- Misunderstanding that 'unlimited' refers to the marital deduction, not unlimited access to funds
- Assuming the surviving spouse automatically becomes the trustee
