Define: Marital Deduction Trust

A Marital Deduction Trust is a type of trust that allows one spouse to transfer assets to the other spouse upon their death without incurring estate or gift taxes.

When one spouse passes away, their assets are transferred into the trust for the benefit of the surviving spouse. The surviving spouse can then use the assets in the trust for their benefit during their lifetime.

One of the main benefits of a Marital Deduction Trust is that it allows for the deferral of estate taxes until the death of the surviving spouse. It also provides for the financial security of the surviving spouse.

No, the assets in a Marital Deduction Trust are intended for the exclusive benefit of the surviving spouse during their lifetime.

In most cases, a Marital Deduction Trust cannot be revoked or amended once it is established. However, there may be certain circumstances where changes can be made with the approval of a court.

Upon the death of the surviving spouse, the assets in the trust are distributed according to the terms of the trust document, which may include passing to the couple’s children or other beneficiaries.

Generally, any type of asset can be placed in a Marital Deduction Trust, including real estate, investments, and personal property.

Assets in a Marital Deduction Trust may be protected from the creditors of the surviving spouse, but this can vary depending on state laws and the specific circumstances.

A Marital Deduction Trust is specifically designed to take advantage of the marital deduction for estate tax purposes, while a traditional trust may have different purposes and benefits.

It is highly recommended to consult with a qualified estate planning attorney to establish a Marital Deduction Trust, as it involves complex legal and tax considerations.