Which provision allows the surviving spouse to receive an unlimited amount of transfers free of estate tax?

Which provision allows the surviving spouse to receive an unlimited amount of transfers free of estate tax?

• A. Tax-Wise Will
• B. Unlimited Marital Deduction
• C. Credit Shelter Trust
• D. Unified Gift and Estate Tax

Answer: (B)

Unlimited marital deduction allows transfers to a surviving spouse to pass free of federal estate tax at the death of the first spouse. The key idea is that, for a citizen spouse, the government does not tax the transfer from the decedent to the survivor, no matter how large the amount. This defers tax until the surviving spouse’s own death (or later taxable events), which can preserve wealth for the family. A caveat: non-citizen spouses don’t get the full unlimited benefit unless a QDOT is used, so the unlimited amount applies in the typical citizen-spouse scenario. Credit Shelter Trusts, on the other hand, are about sheltering assets using the deceased spouse’s estate tax exemption and providing for the survivor, not about unlimited tax-free transfers at the first death. A Tax-Wise Will is a planning device aimed at reducing taxes but does not by itself grant an unlimited tax-free transfer to the spouse. The Unified Gift and Estate Tax is the overall framework governing gifts and estates; the unlimited marital deduction is a feature within that framework.

Unlimited marital deduction allows transfers to a surviving spouse to pass free of federal estate tax at the death of the first spouse. The key idea is that, for a citizen spouse, the government does not tax the transfer from the decedent to the survivor, no matter how large the amount. This defers tax until the surviving spouse’s own death (or later taxable events), which can preserve wealth for the family. A caveat: non-citizen spouses don’t get the full unlimited benefit unless a QDOT is used, so the unlimited amount applies in the typical citizen-spouse scenario.

Credit Shelter Trusts, on the other hand, are about sheltering assets using the deceased spouse’s estate tax exemption and providing for the survivor, not about unlimited tax-free transfers at the first death. A Tax-Wise Will is a planning device aimed at reducing taxes but does not by itself grant an unlimited tax-free transfer to the spouse. The Unified Gift and Estate Tax is the overall framework governing gifts and estates; the unlimited marital deduction is a feature within that framework.