If a married couple has a community property estate of $500,000, each has a net estate value of $250,000. Assuming both spouses have wills that leave their estates to each other, when one spouse dies, the other will inherit the decedent's $250,000 estate. That inheritance is free of estate tax, because the marital deduction eliminates estate tax on anything from one spouse to the other.
Definition from Nolo’s Plain-English Law Dictionary
A deduction allowed by the federal estate tax laws for all property passed to a surviving spouse who is a U.S. citizen. This deduction (which really functions as an exemption) allows anyone, even a billionaire, to pass his or her entire estate to a surviving spouse without any estate tax at all.Under current federal law, this deduction is not available to same-sex couples even if they were validly married in a state that allows same-sex marriage.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:19 pm