What is a marital deduction trust?
A Marital Deduction Trust is a special trust set up under the laws of West Virginia that allow the assets of a deceased spouse to be passed to the surviving spouse without being subject to the estate tax. This trust can be established before or after death, with the surviving spouse taking possession of the trust assets, but not full ownership. The trust assets go through a two-step process before reaching the surviving spouse. First, the assets are placed into the trust and the spouse who created the trust (either before or after death) becomes the trustee. Second, the surviving spouse is the beneficiary of the trust and the assets are passed to them without being subject to the estate tax. The Marital Deduction Trust is an excellent way to ensure that a surviving spouse is provided for after the death of the other and that the estate tax is avoided.
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