The estate tax marital deduction—also known as the unlimited marital deduction or the marital deduction—allows one married spouse to transfer an unlimited amount of assets to the other spouse without incurring estate taxes on those assets. The marital deduction is calculated by subtracting the value of the assets passed on or transferred to the other spouse from the total value of the transferring spouse’s gross estate.

A transfer that qualifies for the marital deduction may be made while both spouses are alive or after the death of a spouse, as provided in the deceased spouse’s will.

In New Hampshire, there is no state-level estate tax, so the concept of an estate tax marital deduction is relevant only in the context of federal estate taxes. Under federal law, the estate tax marital deduction allows a married individual to transfer an unlimited amount of assets to their spouse without incurring federal estate taxes, whether the transfer occurs during their lifetime or at death through a will. This deduction effectively defers the estate tax on these assets until the death of the second spouse. To qualify for the marital deduction, the recipient spouse must be a U.S. citizen, and the assets must be transferred outright or through certain types of trusts designed to qualify for the marital deduction. It's important to note that while New Hampshire does not impose an estate tax, residents are still subject to federal estate tax regulations, which include the marital deduction. Individuals with significant assets or complex estate planning needs should consult with an attorney to navigate federal estate tax laws and ensure proper estate planning strategies are in place.