Q What is the unlimited marital deduction?
The unlimited marital deduction allows a married couple to pass an unlimited amount of money, estate tax free, to a surviving spouse. As an example, assume Steve and Carrie are married and Steve passes away with an estate worth $7 million and a federal estate tax exemption of $5 million. In the absence of the unlimited marital deduction, Steve could only pass $5 million dollars estate tax free to Carrie. His estate would pay tax on the balance of $2 million. At a tax rate of 40%, that would be $800,000 in federal estate tax. With the unlimited marital deduction, Steve can pass his entire estate, tax free, to Carrie.
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