Terminable interests do not qualify for the
marital deduction (Sec.
If, however, an election is made to not have the donee spouse's interest treated as a "qualifying income interest for life," the
marital deduction is not allowed if the donor gives an interest in the contract to a third party, or keeps an interest for himself, and there is a possibility that the donor or the third party could receive some benefits from this interest after the donee's interest ends.
6511 has not expired, a taxpayer may file an amended Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, or a supplemental Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, to claim the
marital deduction for a gift or bequest to the taxpayer's same-sex spouse and to restore the applicable exclusion amount allocated to that transfer.
If the tax return is for a married couple and they are married tiling separate, determine if there are also separate property considerations that can affect the
marital deduction.
In its petition filed with the Tax Court, the estate argued that the
marital deduction for the 51 percent bequest to the surviving spouse should be increased by a control premium of 38.
Probably the most severe consequence of the Illinois estate tax decoupling from the federal estate tax is the unavailability of the
marital deduction for transfers to a qualified terminable interest property trust ("QTIP") for Illinois estate tax purposes only.
community property system), if the
marital deduction were to be
Certain trusts and nuptial agreements can be used to protect a individual's estate without disinheriting a spouse in ways that can preserve the
marital deduction.
To prevent a surviving spouse from deferring tax on assets of the deceased spouse and then avoiding the estate tax, Congress instituted IRC Section 2056(d), imposing the estate tax on any transfer to the surviving non-citizen spouse that would otherwise pass to such spouse's estate tax-free via the
marital deduction.
Property that passes by operation of law cannot qualify for the
marital deduction.
If all three tests are met, the interest will not qualify for the
marital deduction.
As a corollary to the last situation, where the value of the property left to the surviving spouse creates a
marital deduction which reduces the deceased spouse's taxable estate below the amount offset by the deceased spouse's estate tax unified credit exemption equivalent, a disclaimer by the surviving spouse can be used to increase the deceased spouse's estate to an amount which will be fully offset by the unified credit equivalent, and keep the property out of the estate of the surviving spouse for estate tax purposes.
