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.
If you would like to learn how you can avoid or minimize estate taxes and pass along more to your heirs, give us a call today at (763) 420-5087.