Tax planning and the unlimited marital deduction At first glance, it would appear that all of a decedent's property should be left to his or her spouse to avoid estate taxes. However, using the marital deduction to reduce a decedent's taxable estate to zero could result in a waste of the decedent's unified credit under Sec. 2010. Moreover, all of the property would be taxed as part of the surviving spouse's estate to the extent it is not consumed or given away. For these reasons, an effective estate plan usually attempts to leave a taxable estate exactly equal to the tax shelter provided by this credit. H and W are happily married. The couple currently has simple wills, providing that upon either's death, all of the assets of one will be left to the other. Upon the death of the survivor, all of the assets are to be passed to the children. They both had assets worth $2,000,000 for a total of $4,000,000. In 2008, H died with an estate of $2,000,000 and left it all to W who dies shortly thereafter.
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This note was uploaded on 09/09/2011 for the course TAX 5015 taught by Professor Kelliher,c during the Spring '08 term at University of Central Florida.