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).
A Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust arrangement commonly used in estate planning. It is designed to provide certain tax benefits while ensuring that the surviving spouse has access to income during their lifetime, with the power to appoint the trust's assets upon their death. Keywords: Delaware, Marital Deduction Trust, Lifetime Income, Power of Appointment, Beneficiary Spouse, Residuary Trust. There are a few variations of the Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust. These include: 1. Delaware TIP Trust: This type of trust allows the surviving spouse to have access to income from the trust assets during their lifetime, while ensuring that the remaining assets are distributed according to the terms of the trust upon their death. 2. Delaware SLAT: A Spousal Lifetime Access Trust allows one spouse to create a trust for the benefit of the other spouse, providing income during their lifetime and flexibility in distributing assets to other beneficiaries. 3. Delaware PRT: A Power of Appointment Residuary Trust allows the surviving spouse to have control over the trust's assets during their lifetime, with the ability to distribute the remaining assets to other beneficiaries upon their death. 4. Delaware SMT: A Spousal Marital Trust is similar to a Marital Deduction Trust, providing income to the surviving spouse during their lifetime, with the remainder passing to other designated beneficiaries. In conclusion, the Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that provides tax benefits and allows for the protection and distribution of assets according to the wishes of the trust creator. Different variations, such as the Delaware TIP Trust, Delaware SLAT, Delaware PRT, and Delaware SMT, cater to specific needs and objectives of estate planning.A Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust arrangement commonly used in estate planning. It is designed to provide certain tax benefits while ensuring that the surviving spouse has access to income during their lifetime, with the power to appoint the trust's assets upon their death. Keywords: Delaware, Marital Deduction Trust, Lifetime Income, Power of Appointment, Beneficiary Spouse, Residuary Trust. There are a few variations of the Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust. These include: 1. Delaware TIP Trust: This type of trust allows the surviving spouse to have access to income from the trust assets during their lifetime, while ensuring that the remaining assets are distributed according to the terms of the trust upon their death. 2. Delaware SLAT: A Spousal Lifetime Access Trust allows one spouse to create a trust for the benefit of the other spouse, providing income during their lifetime and flexibility in distributing assets to other beneficiaries. 3. Delaware PRT: A Power of Appointment Residuary Trust allows the surviving spouse to have control over the trust's assets during their lifetime, with the ability to distribute the remaining assets to other beneficiaries upon their death. 4. Delaware SMT: A Spousal Marital Trust is similar to a Marital Deduction Trust, providing income to the surviving spouse during their lifetime, with the remainder passing to other designated beneficiaries. In conclusion, the Delaware Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that provides tax benefits and allows for the protection and distribution of assets according to the wishes of the trust creator. Different variations, such as the Delaware TIP Trust, Delaware SLAT, Delaware PRT, and Delaware SMT, cater to specific needs and objectives of estate planning.
