Unlimited Marital Deduction

Definition - What does Unlimited Marital Deduction mean?

Unlimited marital deduction is a tax provision that allows one partner in a marriage to transfer ownership of an unlimited amount of their assets to the other partner without incurring taxes. This unlimited deduction helps married people preserve their estates without having to sacrifice a large percentage to taxes. In terms of life insurance, this means the surviving spouse would receive the death benefit tax-free.

Insuranceopedia explains Unlimited Marital Deduction

An example of the unlimited limited marital deduction would be a husband who transfers ownership of his collection of vintage automobiles to his wife. In this circumstance, the wife would not have to pay any taxes on the automobiles. Special tax rules are made for married couples. Oftentimes, gifts over a certain value can be subject to gift taxes. However, the IRS allows married couples exemptions. It is also common for married couples to join their assets anyway.

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