What is a marital deduction?

A marital deduction is a tax law provision that allows certain transfers of property between spouses (or legally recognized partners in some states) to be exempt from taxation. In Kansas, the marital deduction is applied to transfers of property made through a divorce agreement, such as retirement accounts, life insurance policies, and real estate. Spouses are generally able to transfer their assets to each other without facing federal tax liability, allowing the transfer of property to take place without an expensive tax penalty. However, in some cases the marital deduction may not apply if certain conditions are not met. For example, if the transfer involves a trust, special rules may apply. Additionally, the marital deduction does not apply to transfers made after a divorce or separation, as well as if the transfer is made to someone other than the spouse.

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