Seven requirements must be met for an interest to qualify for the federal estate tax marital deduction:
1.The decedent must be legally married at the time of his or her death;
2.The person to whom the decedent is legally married at the time of his or her death must survive the decedent;
3.The surviving spouse must be a U.S. citizen (or the property must be held in a Qualified Domestic Trust.
4.The interest passing to the surviving spouse must be includable in the decedentýs gross estate in the United States;
5.The interest must pass to the surviving spouse;
6.The interest received by the surviving spouse must be a deductible interest; and
7.The value of the interest passing to the surviving spouse must be at its net value.
An interest is nondeductible to the extent that it is not includable in the decedentýs gross estate. A marital deduction will not be allowed for property that is otherwise deductible as an expense, claim or loss. No double deduction is permitted. Thus, an interest cannot qualify for the marital deduction if it otherwise is deducted under either IRC Section 2053 or Section 2054. IRC Section 2056(b)(9). For example, no marital deduction is allowed for property that passes to the surviving spouse that is used by the estate to pay the decedentýs funeral expenses.
Section 2056(c) of the IRC defines passing to include interests acquired by the surviving spouse by will, intestate succession, dower, curtesy, statutory share, right of survivorship, the exercise or default of exercise of a power of appointment, or pursuant to a life insurance beneficiary designation. The passing requirement also can be satisfied by designating the surviving spouse as the beneficiary of employee death benefits or any other annuity includable in the decedentýs gross estate under IRC Section 2039. (Treas. Reg. §20.2056(c)-1, 2, 3).
The Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a unique estate planning tool that offers various benefits for married couples in Arkansas. This type of trust is designed to provide financial security for the surviving spouse while minimizing estate taxes upon their passing. Key features of the Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Marital Deduction: This trust qualifies for the marital deduction, which allows the value of assets transferred to the trust to be excluded from the taxable estate of the deceased spouse. This deduction helps reduce estate taxes for the surviving spouse. 2. Lifetime Income: The surviving spouse is entitled to receive income generated by the trust assets for the remainder of their life. This ensures a steady stream of income to support their lifestyle needs. 3. Power of Appointment: This trust provides the surviving spouse with a power of appointment, allowing them the ability to direct the distribution of trust assets upon their death. This provides flexibility and control over the disposition of assets to beneficiaries. 4. Beneficiary Spouse: The surviving spouse is named as the primary beneficiary of the trust, ensuring their financial well-being throughout their lifetime. 5. Residuary Trust: Upon the death of the surviving spouse, any remaining trust assets, known as the residue, are distributed to the named beneficiaries. This can include children, grandchildren, or other individuals or charities designated by the settler. Different types of Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Irrevocable Marital Deduction Trust: This type of trust cannot be altered or revoked by the settler once it is created. It provides maximum estate tax savings but restricts the settler's control over the assets. 2. Revocable Marital Deduction Trust: Unlike the irrevocable trust, this type of trust allows the settler to make changes or revoke the trust during their lifetime. While it offers flexibility, it may have limited estate tax savings compared to the irrevocable trust. 3. Charitable Marital Deduction Trust: This variation of the trust includes a charitable organization as one of the beneficiaries. It offers potential income tax deductions, in addition to estate tax savings, for the settler. In conclusion, the Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a powerful estate planning vehicle that provides financial security for the surviving spouse and helps minimize estate taxes. Depending on the goals and circumstances of the settler, different variations of this trust exist to cater to their specific needs.The Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a unique estate planning tool that offers various benefits for married couples in Arkansas. This type of trust is designed to provide financial security for the surviving spouse while minimizing estate taxes upon their passing. Key features of the Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Marital Deduction: This trust qualifies for the marital deduction, which allows the value of assets transferred to the trust to be excluded from the taxable estate of the deceased spouse. This deduction helps reduce estate taxes for the surviving spouse. 2. Lifetime Income: The surviving spouse is entitled to receive income generated by the trust assets for the remainder of their life. This ensures a steady stream of income to support their lifestyle needs. 3. Power of Appointment: This trust provides the surviving spouse with a power of appointment, allowing them the ability to direct the distribution of trust assets upon their death. This provides flexibility and control over the disposition of assets to beneficiaries. 4. Beneficiary Spouse: The surviving spouse is named as the primary beneficiary of the trust, ensuring their financial well-being throughout their lifetime. 5. Residuary Trust: Upon the death of the surviving spouse, any remaining trust assets, known as the residue, are distributed to the named beneficiaries. This can include children, grandchildren, or other individuals or charities designated by the settler. Different types of Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Irrevocable Marital Deduction Trust: This type of trust cannot be altered or revoked by the settler once it is created. It provides maximum estate tax savings but restricts the settler's control over the assets. 2. Revocable Marital Deduction Trust: Unlike the irrevocable trust, this type of trust allows the settler to make changes or revoke the trust during their lifetime. While it offers flexibility, it may have limited estate tax savings compared to the irrevocable trust. 3. Charitable Marital Deduction Trust: This variation of the trust includes a charitable organization as one of the beneficiaries. It offers potential income tax deductions, in addition to estate tax savings, for the settler. In conclusion, the Arkansas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a powerful estate planning vehicle that provides financial security for the surviving spouse and helps minimize estate taxes. Depending on the goals and circumstances of the settler, different variations of this trust exist to cater to their specific needs.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
