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 Massachusetts Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust that allows individuals to transfer assets to a trust while still providing income and benefits for their surviving spouse. This trust is specifically designed to minimize estate taxes by utilizing the marital deduction, which allows for the transfer of unlimited assets to a surviving spouse without incurring any estate taxes. Keywords: Massachusetts Marital Deduction Trust, Lifetime Income, Power of Appointment, Beneficiary Spouse, Residuary Trust, estate taxes, assets, transfer, surviving spouse. There are different types of Massachusetts Marital Deduction Trusts with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, which include: 1. Irrevocable Marital Deduction Trust: In this type of trust, the spouse's income and benefits from the trust are fixed and cannot be altered or revoked by the granter. The power of appointment may still exist, allowing the spouse to appoint the remaining assets to other beneficiaries upon their death. 2. Revocable Marital Deduction Trust: This trust allows the granter to retain control and make changes to the trust during their lifetime. The spouse receives income and benefits from the trust, but the granter has the power to modify or revoke the trust at any time. The power of appointment may also be present, providing flexibility to the spouse in distributing assets upon their death. 3. TIP Trust (Qualified Terminable Interest Property Trust): The TIP trust allows the granter to transfer assets to the trust, ensuring that the surviving spouse receives a specific income for their lifetime. The surviving spouse cannot have access to the principal, but they are granted the power of appointment to distribute the remaining assets to other beneficiaries upon their death. 4. AB Trust (also known as "A/B Trust" or "Marital and Bypass Trust"): This trust divides the assets into two sub-trusts upon the death of the granter. The marital trust (A trust) provides income and benefits to the surviving spouse, utilizing the marital deduction. The bypass trust (B trust) allows for the preservation and transfer of assets to the next generation free from estate taxes. By utilizing a Massachusetts Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, individuals can effectively plan for the distribution of their assets, minimize estate taxes, and ensure the financial security of their surviving spouse. It is important to consult with a qualified estate planning attorney or financial advisor to determine the most suitable type of trust for one's specific circumstances.A Massachusetts Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a type of trust that allows individuals to transfer assets to a trust while still providing income and benefits for their surviving spouse. This trust is specifically designed to minimize estate taxes by utilizing the marital deduction, which allows for the transfer of unlimited assets to a surviving spouse without incurring any estate taxes. Keywords: Massachusetts Marital Deduction Trust, Lifetime Income, Power of Appointment, Beneficiary Spouse, Residuary Trust, estate taxes, assets, transfer, surviving spouse. There are different types of Massachusetts Marital Deduction Trusts with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, which include: 1. Irrevocable Marital Deduction Trust: In this type of trust, the spouse's income and benefits from the trust are fixed and cannot be altered or revoked by the granter. The power of appointment may still exist, allowing the spouse to appoint the remaining assets to other beneficiaries upon their death. 2. Revocable Marital Deduction Trust: This trust allows the granter to retain control and make changes to the trust during their lifetime. The spouse receives income and benefits from the trust, but the granter has the power to modify or revoke the trust at any time. The power of appointment may also be present, providing flexibility to the spouse in distributing assets upon their death. 3. TIP Trust (Qualified Terminable Interest Property Trust): The TIP trust allows the granter to transfer assets to the trust, ensuring that the surviving spouse receives a specific income for their lifetime. The surviving spouse cannot have access to the principal, but they are granted the power of appointment to distribute the remaining assets to other beneficiaries upon their death. 4. AB Trust (also known as "A/B Trust" or "Marital and Bypass Trust"): This trust divides the assets into two sub-trusts upon the death of the granter. The marital trust (A trust) provides income and benefits to the surviving spouse, utilizing the marital deduction. The bypass trust (B trust) allows for the preservation and transfer of assets to the next generation free from estate taxes. By utilizing a Massachusetts Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust, individuals can effectively plan for the distribution of their assets, minimize estate taxes, and ensure the financial security of their surviving spouse. It is important to consult with a qualified estate planning attorney or financial advisor to determine the most suitable type of trust for one's specific circumstances.
