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 Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a specific type of estate planning tool that offers individuals in Wyoming a way to provide financial security for their spouse while also maintaining control over the distribution of the assets after both spouses pass away. This type of trust allows the creator (also known as the granter) to transfer assets into a trust, which will be managed by a designated trustee. The primary beneficiary of this trust is the granter's spouse, who will have income generated from the trust assets for the duration of their lifetime. This ensures that the surviving spouse will have a steady stream of income to support their lifestyle even if the granter predeceases them. One significant advantage of this trust is the inclusion of a power of appointment feature. This means that the surviving spouse has the authority to designate who will inherit the remaining trust assets upon their death. This power allows the surviving spouse to have some control over the ultimate distribution of assets, which can be particularly useful if there are children from previous marriages or other individuals the surviving spouse wishes to provide for. Additionally, the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust also establishes a residuary trust component. This trust is created to hold and distribute any remaining trust assets not consumed by the surviving spouse during their lifetime. The beneficiary or beneficiaries of the residuary trust are typically named by the granter in the trust document and can consist of children, grandchildren, or any other individuals the granter wishes to benefit. It's important to note that there may be variations or different names for this type of trust, as it can be customized to meet the specific needs and goals of the granter. Some alternatives or variations of the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may include: 1. Wyoming Marital Trust with Income and Power of Appointment: This type of trust may exclude the residuary trust component and focus solely on providing a lifetime income to the surviving spouse, with the power to appoint the remaining assets. 2. Wyoming TIP Trust: TIP stands for "Qualified Terminable Interest Property." In this variation, the trust assets qualify for the marital deduction, ensuring that estate tax benefits are maximized, while also offering the surviving spouse income for their lifetime. 3. Wyoming Dynastic Trust: This version of the trust extends beyond the lifetime of the surviving spouse and aims to provide ongoing financial benefits for multiple generations, often by allowing a limited power of appointment and including provisions for the appointment of successor trustees. In conclusion, the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that allows individuals to provide financial security for their spouse while also retaining control over the distribution of assets. With variations available to suit different goals and circumstances, this trust can be tailored to meet the specific needs and objectives of the granter.The Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a specific type of estate planning tool that offers individuals in Wyoming a way to provide financial security for their spouse while also maintaining control over the distribution of the assets after both spouses pass away. This type of trust allows the creator (also known as the granter) to transfer assets into a trust, which will be managed by a designated trustee. The primary beneficiary of this trust is the granter's spouse, who will have income generated from the trust assets for the duration of their lifetime. This ensures that the surviving spouse will have a steady stream of income to support their lifestyle even if the granter predeceases them. One significant advantage of this trust is the inclusion of a power of appointment feature. This means that the surviving spouse has the authority to designate who will inherit the remaining trust assets upon their death. This power allows the surviving spouse to have some control over the ultimate distribution of assets, which can be particularly useful if there are children from previous marriages or other individuals the surviving spouse wishes to provide for. Additionally, the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust also establishes a residuary trust component. This trust is created to hold and distribute any remaining trust assets not consumed by the surviving spouse during their lifetime. The beneficiary or beneficiaries of the residuary trust are typically named by the granter in the trust document and can consist of children, grandchildren, or any other individuals the granter wishes to benefit. It's important to note that there may be variations or different names for this type of trust, as it can be customized to meet the specific needs and goals of the granter. Some alternatives or variations of the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust may include: 1. Wyoming Marital Trust with Income and Power of Appointment: This type of trust may exclude the residuary trust component and focus solely on providing a lifetime income to the surviving spouse, with the power to appoint the remaining assets. 2. Wyoming TIP Trust: TIP stands for "Qualified Terminable Interest Property." In this variation, the trust assets qualify for the marital deduction, ensuring that estate tax benefits are maximized, while also offering the surviving spouse income for their lifetime. 3. Wyoming Dynastic Trust: This version of the trust extends beyond the lifetime of the surviving spouse and aims to provide ongoing financial benefits for multiple generations, often by allowing a limited power of appointment and including provisions for the appointment of successor trustees. In conclusion, the Wyoming Marital Deduction Trust with Lifetime Income and Power of Appointment in Beneficiary Spouse and Residuary Trust is a versatile estate planning tool that allows individuals to provide financial security for their spouse while also retaining control over the distribution of assets. With variations available to suit different goals and circumstances, this trust can be tailored to meet the specific needs and objectives of the granter.
