Marital Deduction

The marital deduction is an unlimited estate and gift tax provision under U.S. law that allows spouses to transfer assets between one another, either during life or at death, without owing federal estate or gift tax on those transfers. While this lets spouses defer estate taxes until the surviving spouse dies, the assets transferred will then be subject to estate tax if they exceed the applicable exemption amount at the time of the second spouse's death. This deduction is only available for transfers to a spouse who is a U.S. citizen, with special rules applying for non-citizen spouses via a qualified domestic trust.