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).
Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a specific type of trust arrangement that allows married couples to effectively manage and distribute their assets while minimizing estate taxes upon the death of the first spouse. This trust is designed to take advantage of the marital deduction, which allows unlimited transfer of assets between spouses without incurring gift or estate taxes. By utilizing this trust, the first spouse to pass away can leave assets to their surviving spouse, while still maintaining control over how those assets are distributed after the surviving spouse's death. The primary components of an Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Marital Deduction: The trust utilizes the marital deduction to transfer assets from the deceased spouse to the surviving spouse, ensuring that no estate taxes are owed on the transfer. 2. Lifetime Income Provision: The trust also provides a lifetime income provision for the surviving spouse, ensuring they have a steady stream of income to support their needs and lifestyle. 3. Power of Appointment: The surviving spouse is given the power of appointment over the assets held within the trust. This means they have the ability to direct how the trust assets will be distributed upon their death. They can appoint these assets to their children, other family members, or even charities, providing flexibility in tailoring the distribution of the trust's assets. 4. Residuary Trust: The remaining assets within the trust that are not distributed by the surviving spouse's power of appointment are held in a residuary trust. This trust will typically benefit the couple's children or other designated beneficiaries and can be structured to provide ongoing support or distribution of assets over time. It's important to note that variations of this trust arrangement may exist, depending on individual circumstances and preferences. For example, some couples may opt for a trust that includes specific provisions for supporting minor children or grandchildren. Additionally, individual estate planning goals and family dynamics may influence the specific design and naming of the trust. Therefore, it's recommended to consult with an experienced estate planning attorney to determine the best structure and naming for an Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust based on individual circumstances.Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a specific type of trust arrangement that allows married couples to effectively manage and distribute their assets while minimizing estate taxes upon the death of the first spouse. This trust is designed to take advantage of the marital deduction, which allows unlimited transfer of assets between spouses without incurring gift or estate taxes. By utilizing this trust, the first spouse to pass away can leave assets to their surviving spouse, while still maintaining control over how those assets are distributed after the surviving spouse's death. The primary components of an Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust include: 1. Marital Deduction: The trust utilizes the marital deduction to transfer assets from the deceased spouse to the surviving spouse, ensuring that no estate taxes are owed on the transfer. 2. Lifetime Income Provision: The trust also provides a lifetime income provision for the surviving spouse, ensuring they have a steady stream of income to support their needs and lifestyle. 3. Power of Appointment: The surviving spouse is given the power of appointment over the assets held within the trust. This means they have the ability to direct how the trust assets will be distributed upon their death. They can appoint these assets to their children, other family members, or even charities, providing flexibility in tailoring the distribution of the trust's assets. 4. Residuary Trust: The remaining assets within the trust that are not distributed by the surviving spouse's power of appointment are held in a residuary trust. This trust will typically benefit the couple's children or other designated beneficiaries and can be structured to provide ongoing support or distribution of assets over time. It's important to note that variations of this trust arrangement may exist, depending on individual circumstances and preferences. For example, some couples may opt for a trust that includes specific provisions for supporting minor children or grandchildren. Additionally, individual estate planning goals and family dynamics may influence the specific design and naming of the trust. Therefore, it's recommended to consult with an experienced estate planning attorney to determine the best structure and naming for an Ohio Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust based on individual circumstances.
