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 Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a legal arrangement that provides various benefits and protections for married couples in Lima, Arizona. This trust is designed to maximize estate tax savings by utilizing the marital deduction, while also providing income for the surviving spouse and flexibility in distribution of the trust assets. The Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust comes in different variations, including: 1. Traditional Marital Deduction Trust: This type of trust allows for the unlimited marital deduction, meaning that all assets transferred into the trust qualify for the marital deduction and are not subject to estate taxes upon the death of the first spouse. The surviving spouse is entitled to receive income from the trust for the rest of their life. 2. Qualified Terminable Interest Property (TIP) Trust: A TIP Trust allows the granter to provide for a surviving spouse while also retaining control over the final distribution of assets. The surviving spouse receives income from the trust during their lifetime and has the ability to appoint the remaining trust assets to named beneficiaries upon their death. This type of trust is commonly used when the granter wants to ensure that their assets ultimately pass to certain individuals, such as children from a previous marriage or charitable organizations. 3. Trust with Power of Appointment: In this variation, the surviving spouse not only receives income from the trust but also has the power to appoint the remaining trust assets to other individuals or entities. This power allows the surviving spouse to determine the ultimate distribution of the assets, providing flexibility and control over the trust. 4. Residuary Trust: A residuary trust is established to hold any remaining assets after specific bequests and distributions are made. This type of trust can be created alongside a marital deduction trust to ensure that any assets not included in the marital deduction are still distributed according to the granter's wishes. Overall, the Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust provides married couples in Lima, Arizona with significant estate tax benefits, income for the surviving spouse, and flexibility in distributing trust assets. It is crucial to seek the guidance of an experienced estate planning attorney to determine the most suitable type of trust and draft a customized plan that aligns with individual circumstances and goals.The Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a legal arrangement that provides various benefits and protections for married couples in Lima, Arizona. This trust is designed to maximize estate tax savings by utilizing the marital deduction, while also providing income for the surviving spouse and flexibility in distribution of the trust assets. The Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust comes in different variations, including: 1. Traditional Marital Deduction Trust: This type of trust allows for the unlimited marital deduction, meaning that all assets transferred into the trust qualify for the marital deduction and are not subject to estate taxes upon the death of the first spouse. The surviving spouse is entitled to receive income from the trust for the rest of their life. 2. Qualified Terminable Interest Property (TIP) Trust: A TIP Trust allows the granter to provide for a surviving spouse while also retaining control over the final distribution of assets. The surviving spouse receives income from the trust during their lifetime and has the ability to appoint the remaining trust assets to named beneficiaries upon their death. This type of trust is commonly used when the granter wants to ensure that their assets ultimately pass to certain individuals, such as children from a previous marriage or charitable organizations. 3. Trust with Power of Appointment: In this variation, the surviving spouse not only receives income from the trust but also has the power to appoint the remaining trust assets to other individuals or entities. This power allows the surviving spouse to determine the ultimate distribution of the assets, providing flexibility and control over the trust. 4. Residuary Trust: A residuary trust is established to hold any remaining assets after specific bequests and distributions are made. This type of trust can be created alongside a marital deduction trust to ensure that any assets not included in the marital deduction are still distributed according to the granter's wishes. Overall, the Lima Arizona Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust provides married couples in Lima, Arizona with significant estate tax benefits, income for the surviving spouse, and flexibility in distributing trust assets. It is crucial to seek the guidance of an experienced estate planning attorney to determine the most suitable type of trust and draft a customized plan that aligns with individual circumstances and goals.
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.
