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 Tennessee, 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. Tennessee does not impose a state estate tax; the state's estate tax was fully repealed effective January 1, 2016. Therefore, for residents of Tennessee, only the federal estate tax laws apply. Under federal law, the marital deduction is available for assets transferred to a surviving spouse, either during life or at death through a will or other estate planning instrument. The value of the assets transferred to the surviving spouse is deducted from the decedent's gross estate, potentially reducing the taxable estate. It's important to note that 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 trust arrangements.