What is a marital deduction and how does it work?

A marital deduction is an estate planning law that allows married couples to transfer an unlimited amount of assets to each other without paying either federal or California estate taxes. This means that if one spouse dies, the other can transfer all their assets to the other without having to pay estate taxes. The marital deduction applies to any asset that is gifted or inherited, including cash, investments, and real estate. In terms of estate planning, the marital deduction is an important tool because it allows married couples to save money on estate taxes. This means that more money can be passed on to heirs and family members, rather than to the government. The idea behind a marital deduction is simple: Since spouses belong to the same family, it is reasonable to exempt them from having to pay taxes on property passed between them. To make sure the marital deduction is used properly, the state of California requires married couples to follow certain rules. For instance, a marital deduction cannot be used if either spouse has made a gift to someone other than their spouse within the preceding calendar year. Overall, a marital deduction is an important planning tool for married couples in California. By understanding how it works, couples can make sure they are taking advantage of all the estate planning benefits available to them.

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What is a marital deduction and how does it work?

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