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 South Dakota, as in all states, the estate tax marital deduction is primarily governed by federal law, not state law. The federal estate tax marital deduction allows a married individual to transfer an unlimited amount of assets to their spouse without incurring any federal estate taxes. This can be done either during their lifetime or upon death through a will or trust. South Dakota does not impose a state estate tax, so there are no additional state-level regulations or limitations on the marital deduction within the state. It's important for married couples in South Dakota to consider the federal estate tax implications and the unlimited marital deduction when estate planning, especially for high-net-worth individuals who may be subject to federal estate taxes. Consulting with an attorney who specializes in estate planning can provide guidance tailored to individual circumstances.