Marital Transfer

Gifts given during lifetime and unlimited bequests made at death to a spouse escape gift and estate taxes. The first spouse to die can avoid all federal estate taxes by taking advantage of this unlimited marital deduction. The surviving spouse's estate is taxed for these assets at the time of death. Each case needs to be individually assessed to determine the most advantageous amount to transfer.

Qualifying gifts given to a spouse during lifetime or by death or marital transfer are exempt from gift and estate taxes. A qualified gift is generally one that would be included in the spouse's estate if the spouse retained the property until death.