What is a marital deduction and how does it work?

A marital deduction is an estate planning tool that allows spouses to pass assets to each other without being subject to the federal estate tax. In Washington, the marital deduction applies to both real and personal property, including cash, stocks, and bonds. The marital deduction works by allowing one spouse to transfer assets to the other without tax. This means that when one spouse passes away, the other will still have control of the assets. The spouse receiving the assets is not required to pay estate taxes on them until the surviving spouse passes away. The amount of the deduction depends on the value of the assets being transferred. The median estate in Washington is eligible for a $5.49 million marital deduction. This amount will increase each year and is subject to inflation. When one spouse passes away, the surviving spouse can claim a surviving spouse exemption. This exempts the surviving spouse from having to pay estate taxes on anything up to the $5.49 million deduction value. This exemption can mean that the surviving spouse can keep more of the assets and pass them on to heirs with less of a financial burden. In summary, a marital deduction is an estate planning tool that allows spouses to transfer assets without incurring the federal estate tax. In Washington, the amount of the deduction is adjusted for inflation and, upon the passing of one spouse, a surviving spouse exemption may be applied, which can reduce the financial burden of transferring assets.

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What is a marital deduction and how does it work?

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