What is a marital deduction trust?
A marital deduction trust is a type of trust used in Massachusetts inheritance law. It allows a surviving spouse to defer paying estate taxes on the inherited assets of a deceased spouse. This is done by placing the assets in a trust and allowing the surviving spouse to use them for their own benefit during their lifetime. In a marital deduction trust, the assets are transferred to trustees who are responsible for managing them according to the terms of the trust. The trust can include provisions that allow the surviving spouse to make distributions to other beneficiaries, such as children, during their lifetime. Upon the surviving spouse’s death, the remaining assets are then distributed according to the original terms of the trust. The main benefit of a marital deduction trust is that it enables surviving spouses to defer paying estate taxes on their inherited assets. Under Massachusetts probate law, the tax liability for the estate of a deceased person is assumed by the surviving spouse. By transferring the assets into a trust, the surviving spouse is able to delay paying taxes until their death. This helps them to preserve the value of their inheritance for themselves, and other beneficiaries, for a longer period of time.
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