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 Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, also known as a Qualified Terminable Interest Property (TIP) trust, is a legal arrangement that allows a married couple to ensure financial security for the surviving spouse while protecting the interests of other beneficiaries. In this type of trust, the first spouse to pass away creates a trust with specific provisions. The surviving spouse, known as the beneficiary spouse, is entitled to receive income from the trust during their lifetime. This income provides ongoing financial support and security for the surviving spouse. The trust also includes a power of appointment, which grants the beneficiary spouse the authority to determine how the trust assets will be distributed among the remaining beneficiaries upon their death. This power allows the surviving spouse to direct the disposition of the trust assets according to their wishes. Furthermore, the trust establishes a residuary trust, which holds any remaining trust assets after the death of the surviving spouse. These assets are distributed to the named beneficiaries in accordance with the instructions set forth in the trust agreement. There are different variations of the Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, depending on the specific needs and circumstances of the individuals involved. Some of these variations may include: 1. General Power of Appointment: In this variation, the beneficiary spouse has the authority to appoint the trust assets to anyone, including themselves. This type of power provides maximum flexibility to the surviving spouse. 2. Limited Power of Appointment: This variation restricts the beneficiary spouse's power to only appoint the trust assets among a predetermined group of beneficiaries. The surviving spouse cannot appoint the assets to themselves in this case. 3. Special Needs Trust: If the surviving spouse has special needs, such as a disability or medical condition, a special needs trust can be created within the overall structure of the Marital Deduction Trust. This ensures that the spouse's eligibility for government assistance programs is not affected while still providing financial support. 4. Charitable Marital Deduction Trust: Some couples may choose to include charitable organizations as beneficiaries in their trust. This allows for a portion of the trust assets to be distributed to these charitable organizations upon the death of the surviving spouse, while still providing income and benefits to the surviving spouse during their lifetime. In conclusion, a Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a comprehensive estate planning tool that enables married couples to protect and provide for their surviving spouse while maintaining control over the disposition of their assets. Different variations of the trust can be tailored to meet the unique needs and goals of the couple.A Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, also known as a Qualified Terminable Interest Property (TIP) trust, is a legal arrangement that allows a married couple to ensure financial security for the surviving spouse while protecting the interests of other beneficiaries. In this type of trust, the first spouse to pass away creates a trust with specific provisions. The surviving spouse, known as the beneficiary spouse, is entitled to receive income from the trust during their lifetime. This income provides ongoing financial support and security for the surviving spouse. The trust also includes a power of appointment, which grants the beneficiary spouse the authority to determine how the trust assets will be distributed among the remaining beneficiaries upon their death. This power allows the surviving spouse to direct the disposition of the trust assets according to their wishes. Furthermore, the trust establishes a residuary trust, which holds any remaining trust assets after the death of the surviving spouse. These assets are distributed to the named beneficiaries in accordance with the instructions set forth in the trust agreement. There are different variations of the Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, depending on the specific needs and circumstances of the individuals involved. Some of these variations may include: 1. General Power of Appointment: In this variation, the beneficiary spouse has the authority to appoint the trust assets to anyone, including themselves. This type of power provides maximum flexibility to the surviving spouse. 2. Limited Power of Appointment: This variation restricts the beneficiary spouse's power to only appoint the trust assets among a predetermined group of beneficiaries. The surviving spouse cannot appoint the assets to themselves in this case. 3. Special Needs Trust: If the surviving spouse has special needs, such as a disability or medical condition, a special needs trust can be created within the overall structure of the Marital Deduction Trust. This ensures that the spouse's eligibility for government assistance programs is not affected while still providing financial support. 4. Charitable Marital Deduction Trust: Some couples may choose to include charitable organizations as beneficiaries in their trust. This allows for a portion of the trust assets to be distributed to these charitable organizations upon the death of the surviving spouse, while still providing income and benefits to the surviving spouse during their lifetime. In conclusion, a Louisiana Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a comprehensive estate planning tool that enables married couples to protect and provide for their surviving spouse while maintaining control over the disposition of their assets. Different variations of the trust can be tailored to meet the unique needs and goals of the couple.
