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 Ohio, the estate tax marital deduction aligns with federal law, which allows a married spouse to transfer an unlimited amount of assets to their surviving spouse without incurring federal estate taxes. This is known as the unlimited marital deduction. Ohio does not have a state estate tax; it was repealed effective January 1, 2013. Therefore, for Ohio residents, only the federal estate tax laws apply. The federal estate tax exemption is high enough that most estates are not subject to estate taxes. For assets transferred at death, the marital deduction is typically claimed on the federal estate tax return (Form 706). Transfers made during life may also qualify for the unlimited marital deduction, provided they meet certain criteria under federal tax law, such as being a transfer of property interests that are not terminable.