Unlimited Marital Deduction
What Does Unlimited Marital Deduction Mean?
The unlimited marital deduction is a tax provision that allows one spouse to transfer an unlimited amount of assets to the other spouse without incurring taxes. This provision helps married couples preserve their estates without losing a significant portion to taxes. Regarding life insurance, it ensures that the surviving spouse can receive the death benefit entirely tax-free.
Insuranceopedia Explains Unlimited Marital Deduction
An example of the unlimited marital deduction would be a husband transferring ownership of his collection of vintage automobiles to his wife. In this case, the wife would not have to pay any taxes on the automobiles. Special tax rules apply to married couples, and while gifts above a certain value are typically subject to gift taxes, the IRS provides exemptions for married couples. It is also common for married couples to combine their assets.
