Marital trust
Umbrella term for any trust (or outright transfer) that qualifies property for the unlimited marital deduction under IRC § 2056. In practice often a QTIP or outright bequest to a U.S. citizen spouse. In A-B planning, the marital side may be called A trust or C trust depending on plan design.
| Facet | Detail |
|---|---|
| Also called | Marital deduction trust, marital share trust, spousal trust |
| A-B / A-B-C role | Marital half of the estate — may map to A (outright/survivor) or C (QTIP) |
| When created | At first death (or outright at death) |
| Revocable | No once funded as sub-trust; survivor's own RLT remains revocable |
| Inter vivos / testamentary | Usually testamentary sub-trust or outright bequest |
| Typical beneficiaries | Surviving U.S. citizen spouse |
| Primary purpose | Defer estate tax at first death via marital deduction |
| Marital deduction | Yes — if qualified (QTIP election for terminable interests) |
| Uses estate exclusion | No for the marital amount itself |
| In survivor's estate | Yes for QTIP; outright marital bequest also in survivor's estate |
| Basis step-up | At first death; QTIP assets step up again at second death |
| Income tax | Depends on structure — outright to spouse vs QTIP trust |
| Crummey powers | No |
| GST / dynasty | Indirect — marital deduction defers tax; remainder planning separate |
| Spendthrift | Outright marital gift: none; QTIP: limited for spouse |
| See-through (IRA) | Spouse as individual IRA beneficiary often better than marital trust |
| Key tradeoff | Tax deferral at first death vs concentration of assets in survivor's estate |