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).
The Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a legal arrangement designed to provide financial security and flexibility for married couples in the state of Oregon. This trust allows the transfer of assets from one spouse to another, while ensuring that the beneficiary spouse receives a lifetime income and has the power to appoint or distribute the remaining trust assets upon their death. The primary purpose of the Oregon Marital Deduction Trust is to minimize estate taxes and maximize the transfer of wealth between spouses. By utilizing the marital deduction provisions of the Internal Revenue Code, couples can establish this trust to effectively defer the payment of estate taxes until the death of the surviving spouse. This type of trust provides several key benefits for the beneficiary spouse, including a guaranteed lifetime income stream. The trust is structured to distribute a fixed annual amount or a percentage of the trust's value to the beneficiary spouse, ensuring financial stability and support throughout their lifetime. This feature can be particularly beneficial for spouses who may not possess the financial acumen or ability to manage large sums of money on their own. Moreover, the beneficiary spouse is also granted the power of appointment. This means they have the authority to direct the ultimate distribution of the trust's remaining assets upon their death. This power allows the surviving spouse to dictate how the assets will be divided among their heirs or other beneficiaries, providing the flexibility to accommodate changing family circumstances or personal preferences. Different variations or types of the Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may include options such as: 1. Testamentary Trust: This trust is created under the terms of a will and becomes effective upon the death of the testator. It ensures that the assets are transferred into the trust and managed according to the provisions outlined in the will. 2. Revocable Trust: With this type of trust, the granter retains the ability to modify or revoke the trust during their lifetime. This can provide additional flexibility for couples who may anticipate changes in their financial situation or family dynamics. 3. Irrevocable Trust: In contrast to a revocable trust, an irrevocable trust cannot be modified or revoked once established. This type of trust offers added asset protection and can further minimize estate taxes. 4. Generation-Skipping Trust: This trust is designed to benefit multiple generations, allowing assets to bypass the immediate beneficiary and directly benefit grandchildren or future descendants. This can be a strategic option for individuals with substantial wealth and a desire to preserve assets for future generations while still providing for the surviving spouse. Overall, the Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust offers a comprehensive solution for married couples seeking to protect and transfer their wealth. By utilizing the various types of this trust, individuals can customize their estate plan to align with their unique circumstances, financial goals, and desired outcomes.The Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a legal arrangement designed to provide financial security and flexibility for married couples in the state of Oregon. This trust allows the transfer of assets from one spouse to another, while ensuring that the beneficiary spouse receives a lifetime income and has the power to appoint or distribute the remaining trust assets upon their death. The primary purpose of the Oregon Marital Deduction Trust is to minimize estate taxes and maximize the transfer of wealth between spouses. By utilizing the marital deduction provisions of the Internal Revenue Code, couples can establish this trust to effectively defer the payment of estate taxes until the death of the surviving spouse. This type of trust provides several key benefits for the beneficiary spouse, including a guaranteed lifetime income stream. The trust is structured to distribute a fixed annual amount or a percentage of the trust's value to the beneficiary spouse, ensuring financial stability and support throughout their lifetime. This feature can be particularly beneficial for spouses who may not possess the financial acumen or ability to manage large sums of money on their own. Moreover, the beneficiary spouse is also granted the power of appointment. This means they have the authority to direct the ultimate distribution of the trust's remaining assets upon their death. This power allows the surviving spouse to dictate how the assets will be divided among their heirs or other beneficiaries, providing the flexibility to accommodate changing family circumstances or personal preferences. Different variations or types of the Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may include options such as: 1. Testamentary Trust: This trust is created under the terms of a will and becomes effective upon the death of the testator. It ensures that the assets are transferred into the trust and managed according to the provisions outlined in the will. 2. Revocable Trust: With this type of trust, the granter retains the ability to modify or revoke the trust during their lifetime. This can provide additional flexibility for couples who may anticipate changes in their financial situation or family dynamics. 3. Irrevocable Trust: In contrast to a revocable trust, an irrevocable trust cannot be modified or revoked once established. This type of trust offers added asset protection and can further minimize estate taxes. 4. Generation-Skipping Trust: This trust is designed to benefit multiple generations, allowing assets to bypass the immediate beneficiary and directly benefit grandchildren or future descendants. This can be a strategic option for individuals with substantial wealth and a desire to preserve assets for future generations while still providing for the surviving spouse. Overall, the Oregon Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust offers a comprehensive solution for married couples seeking to protect and transfer their wealth. By utilizing the various types of this trust, individuals can customize their estate plan to align with their unique circumstances, financial goals, and desired outcomes.
