What is a marital deduction and how does it work?

A marital deduction is a tax deduction for estate and gift taxes that enables married couples to transfer property between them without being subject to taxes. This tax deduction is allowed by the federal government and is usually recognized by most states, including Oklahoma. In order to be eligible for the marital deduction, the married couple must both be citizens of the United States. Additionally, the property must be transferred directly from one spouse to the other with no other parties involved. Additionally, certain types of property may not be eligible for the deduction such as insurance policies, annuities, IRA’s, and other qualified retirement plans. In Oklahoma, the marital deduction is allowed for both estate and gift taxes. This means that when a married couple transfers property from one spouse to the other, the amount of taxes due is based on the amount of the transferred property instead of the full value of the estate or gift. This offers a significant benefit to married couples, as it reduces the amount of taxes they must pay when transferring property. The marital deduction is an important tool for estate planning in Oklahoma and can help married couples transfer their property in a tax-efficient manner. It is important to consult with an experienced estate planning attorney in Oklahoma to determine if a marital deduction is available for a particular asset and to ensure that the deductions are claimed correctly.

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What is a marital deduction and how does it work?

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