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).
Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust commonly used in estate planning. This trust is established in accordance with Texas law and allows married individuals to provide for their surviving spouse while also maintaining control over the distribution of their assets. The Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust offers several benefits and features. Firstly, it allows the granter to take advantage of the marital deduction for federal estate tax purposes. This means that the assets transferred to the trust are not subject to estate taxes upon the granter's death, but rather when they pass to the surviving spouse. Furthermore, this trust provides the surviving spouse with lifetime income from the trust assets, ensuring financial security. The trustee manages and invests the assets, generating income that is then distributed to the surviving spouse. This income can help cover living expenses, healthcare costs, or any other financial needs the surviving spouse may have. Moreover, the trust includes a Power of Appointment provision, which grants the surviving spouse the authority to determine how the trust assets will be distributed upon their death. This power allows the surviving spouse to appoint assets to children, grandchildren, or other beneficiaries, thus providing flexibility and control over the ultimate distribution of the trust assets. Additionally, the Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may be structured as either an A/B trust or a TIP trust. In an A/B trust, also known as a bypass trust or credit shelter trust, a portion of the assets pass to the trust upon the granter's death, while the remaining assets transfer directly to the surviving spouse. This type of trust effectively maximizes the use of the granter's federal estate tax exemption. On the other hand, a TIP trust, or Qualified Terminable Interest Property trust, ensures that the surviving spouse receives income from the trust for the rest of their life, but they do not have control over the ultimate distribution of the assets. Instead, the granter designates the beneficiaries who will receive the remaining trust assets upon the surviving spouse's death. In conclusion, the Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that provides for a surviving spouse while maintaining control over the distribution of assets. It offers the benefits of the marital deduction, lifetime income for the surviving spouse, and the ability to appoint assets to designated beneficiaries. Whether structured as an A/B trust or a TIP trust, this type of trust allows individuals to effectively manage their estate and provide for their loved ones in an efficient and controlled manner.Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust commonly used in estate planning. This trust is established in accordance with Texas law and allows married individuals to provide for their surviving spouse while also maintaining control over the distribution of their assets. The Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust offers several benefits and features. Firstly, it allows the granter to take advantage of the marital deduction for federal estate tax purposes. This means that the assets transferred to the trust are not subject to estate taxes upon the granter's death, but rather when they pass to the surviving spouse. Furthermore, this trust provides the surviving spouse with lifetime income from the trust assets, ensuring financial security. The trustee manages and invests the assets, generating income that is then distributed to the surviving spouse. This income can help cover living expenses, healthcare costs, or any other financial needs the surviving spouse may have. Moreover, the trust includes a Power of Appointment provision, which grants the surviving spouse the authority to determine how the trust assets will be distributed upon their death. This power allows the surviving spouse to appoint assets to children, grandchildren, or other beneficiaries, thus providing flexibility and control over the ultimate distribution of the trust assets. Additionally, the Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may be structured as either an A/B trust or a TIP trust. In an A/B trust, also known as a bypass trust or credit shelter trust, a portion of the assets pass to the trust upon the granter's death, while the remaining assets transfer directly to the surviving spouse. This type of trust effectively maximizes the use of the granter's federal estate tax exemption. On the other hand, a TIP trust, or Qualified Terminable Interest Property trust, ensures that the surviving spouse receives income from the trust for the rest of their life, but they do not have control over the ultimate distribution of the assets. Instead, the granter designates the beneficiaries who will receive the remaining trust assets upon the surviving spouse's death. In conclusion, the Travis Texas Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that provides for a surviving spouse while maintaining control over the distribution of assets. It offers the benefits of the marital deduction, lifetime income for the surviving spouse, and the ability to appoint assets to designated beneficiaries. Whether structured as an A/B trust or a TIP trust, this type of trust allows individuals to effectively manage their estate and provide for their loved ones in an efficient and controlled manner.
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.
