Listen to a Business English Dialogue About Marital deduction
Ariana: Hi Dennis, have you heard of the marital deduction in estate planning? It’s a provision in the tax code that allows spouses to transfer assets to each other without incurring estate or gift taxes.
Dennis: Oh, I see. So, it’s a way to ensure that spouses aren’t taxed on assets transferred to each other during their lifetimes or after death?
Ariana: Exactly! The marital deduction helps married couples maximize the amount of wealth they can transfer to each other without being subject to taxes.
Dennis: Are there any limitations or restrictions on the marital deduction?
Ariana: Yes, there are. To qualify for the marital deduction, the transfer must be made to a spouse who is a U.S. citizen, and certain types of property may not be eligible for the deduction.
Dennis: What happens if one spouse is not a U.S. citizen?
Ariana: In that case, there are additional rules and limitations on the amount of property that can be transferred tax-free, although there are still planning strategies available to minimize taxes.
Dennis: Is the marital deduction only available for transfers made after death?
Ariana: No, it can also apply to lifetime transfers between spouses, such as gifts or transfers of property during marriage.
Dennis: Can the marital deduction be used to transfer any amount of assets between spouses?
Ariana: There are limits to the amount of property that can be transferred tax-free using the marital deduction, but for most couples, it’s a valuable tool for estate planning and minimizing tax liability.
Dennis: Thanks for explaining, Ariana. The marital deduction sounds like an important consideration for married couples in estate planning.
Ariana: You’re welcome, Dennis. It’s a key strategy for preserving wealth and minimizing taxes for couples who want to provide for each other and their families.