What Is Section 2056? The Unlimited Marital Deduction

The unlimited marital deduction is a federal estate tax rule under Section 2056 of the Internal Revenue Code that lets a married person leave any amount of property to a surviving U.S.-citizen spouse free of federal estate tax.¹ There is no dollar cap. An estate of $500,000 and an estate of $500 million each pass to a qualifying spouse without triggering the tax. The catch is that the deduction defers estate tax rather than eliminating it: whatever your spouse inherits this way becomes part of their own taxable estate when they die.

How the Deduction Works

Federal estate tax runs at a top rate of 40%.² For 2026, each person has a basic exclusion amount of $15 million, so estates below that threshold owe nothing.³ The marital deduction subtracts the value of qualifying spousal transfers from the gross estate before tax is calculated. Leave a $20 million estate entirely to your spouse and the deduction drops the taxable estate to zero, regardless of how far above the exclusion the estate would otherwise sit.

That’s deferral, not avoidance. Everything the surviving spouse receives through the deduction is counted in their gross estate at their death. The bargain is straightforward: no tax between spouses now, tax collected later. With planning, both spouses’ $15 million exclusions can be preserved, potentially sheltering up to $30 million combined.

What Property Qualifies

Section 2056 imposes four core requirements. Miss any one and the deduction is lost for that property.

The property must be included in the decedent’s gross estate. Only assets subject to federal estate tax jurisdiction can produce a deduction.¹ In community property states, the surviving spouse’s own half was never part of the decedent’s estate, so it can’t generate a marital deduction.

The property must pass from the decedent to the surviving spouse. Wills, intestacy, joint tenancy with right of survivorship, beneficiary designations on retirement accounts and life insurance, and transfers into qualifying trusts all count.⁴

The surviving spouse must be a U.S. citizen. If not, the standard unlimited deduction isn’t available; the property has to move through a Qualified Domestic Trust to get any deferral.

The spouse must actually survive. A survivorship clause is allowed as long as it doesn’t require the spouse to outlive the decedent by more than six months. If the spouse survives that window, the deduction applies. If not, the property passes under a contingent plan and the deduction is lost.¹

The Terminable Interest Rule

The biggest limitation is the terminable interest rule in Section 2056(b). A terminable interest is one that ends after a period of time or when a specific event occurs. Life estates, annuities, and term-of-years interests are common examples.⁵

If you give your spouse an interest that will eventually end, and someone other than your spouse takes the property afterward, the deduction is disallowed. The logic: if property escapes tax in your estate through the deduction, it has to reappear in your spouse’s estate later. An interest that evaporates at your spouse’s death, with the remainder going to your children, would dodge tax in both estates.

The classic disqualifier is a life estate in the family home for your spouse, with the house passing to your children when the spouse dies. The spouse’s interest terminates at death and the children take because of your earlier transfer. No deduction. The fix is either leaving property outright or using one of the trust structures Congress built specifically to satisfy the rule.

Exceptions That Preserve the Deduction

Several arrangements let terminable interests still qualify. Each guarantees the property will eventually face estate tax in the surviving spouse’s estate.

QTIP Trusts

The Qualified Terminable Interest Property trust is the most common tool. A QTIP provides income to the surviving spouse for life while letting you control where the remaining assets go after that spouse dies. It’s the standard answer for people with children from a prior marriage: the spouse is supported, and the children are guaranteed the remainder.

To qualify, the trust must pay all its income to the surviving spouse at least annually, no one can have the power to redirect trust property to anyone other than the spouse during the spouse’s lifetime, and the executor must make an irrevocable QTIP election on the estate tax return.¹

The tradeoff: when the surviving spouse dies, the full value of the QTIP trust is pulled into their gross estate under Section 2044, even though the spouse never chose who ultimately received it.⁶ The tax gets paid at the second death.

Qualified Domestic Trusts

When the surviving spouse is not a U.S. citizen, the marital deduction is only available if the property passes through a Qualified Domestic Trust. The concern is practical: a non-citizen spouse could move assets outside U.S. tax jurisdiction, making later collection impossible.

A QDOT must have at least one trustee who is a U.S. citizen or domestic corporation, and the trust document must prohibit distributions of principal unless the U.S. trustee has the right to withhold estate tax on the distribution.⁷ Both principal distributions during the spouse’s life and the value remaining in the trust at the spouse’s death trigger the QDOT estate tax. Trust income paid to the spouse is not subject to that tax, though normal income tax still applies.

If the decedent didn’t create a QDOT before dying, the surviving spouse can set one up and fund it after death, as long as it’s in place and the election is made by the estate tax return’s filing deadline, including extensions.

Other Qualifying Arrangements

An estate trust, where the trust remainder passes to the surviving spouse’s own estate at their death, guaranteeing inclusion in their taxable estate.
A life estate combined with a general power of appointment, where the spouse receives all income and holds the unrestricted power to direct the property to themselves or their estate.
A survivorship or common-disaster clause that requires the spouse to survive by no more than six months, provided the spouse actually survives that period.

How Portability Fits In

The marital deduction is no longer the only way to preserve both spouses’ exclusion amounts. Since 2011, portability has let a surviving spouse inherit the deceased spouse’s unused exclusion, called the DSUE.⁸ For 2026, a married couple can potentially shelter up to $30 million between them without complex trust planning.

The two tools often work in sequence. The first spouse dies and leaves everything to the survivor. The marital deduction zeroes out the first estate’s tax. The executor files Form 706 and elects portability. The surviving spouse now carries their own $15 million exclusion plus the deceased spouse’s unused amount. When the survivor dies, the combined exclusion shelters the estate.

Portability didn’t make trust-based planning obsolete. QTIP trusts still matter when you want to control where assets go after the second death, protect assets from a surviving spouse’s creditors, or allocate the generation-skipping transfer tax exemption, which portability doesn’t cover.

Claiming the Deduction on Form 706

The executor claims the deduction on Form 706, the federal estate tax return, using Schedule M (“Bequests, etc., to Surviving Spouse”).⁹ Every qualifying property interest passing to the surviving spouse is listed individually with its value and a description of how it passed, whether by will, joint tenancy, beneficiary designation, or trust.¹⁰

Form 706 is due within nine months of the date of death. An automatic six-month extension is available by filing Form 4768 before the original deadline.¹¹ That deadline matters because the QTIP and QDOT elections are both made on Schedule M. Miss it, including extensions, and the elections can’t be made and the deduction for that property is lost.

For QTIP property, the executor lists it on Schedule M and claims the deduction for its value. That listing is the election; no separate form is required, and it’s irrevocable once the return is filed.¹ The QDOT election works the same way. The return also documents the surviving spouse’s citizenship status and the trust’s compliance with the statutory requirements.

Where the surviving spouse is a U.S. citizen and the gross estate plus adjusted taxable gifts doesn’t exceed $15 million, Form 706 generally isn’t required, unless the executor wants to elect portability.³ Even estates that owe nothing should consider filing to lock in the deceased spouse’s unused exclusion for the survivor.

State Estate Taxes Are Separate

The federal deduction eliminates federal estate tax at the first death, but roughly a dozen states and the District of Columbia impose their own estate taxes with exclusion amounts well below the federal $15 million threshold. State exemptions range from about $1 million to amounts that mirror the federal level. Some of these states recognize their own version of the marital deduction, and a few require a separate state-level QTIP election on the state estate tax return. A plan built purely for federal purposes can trigger an unexpected state bill, so couples in states with independent estate taxes need planning that accounts for both layers.

1
Office of the Law Revision Counsel. 26 USC 2056 – Bequests, Etc., to Surviving Spouse
2
Office of the Law Revision Counsel. 26 USC 2001 – Imposition and Rate of Tax
3
Internal Revenue Service. What’s New – Estate and Gift Tax
4
Internal Revenue Service. Frequently Asked Questions on Estate Taxes
5
eCFR. 26 CFR 20.2056(b)-1 – Marital Deduction; Limitation in Case of Life Estate or Other Terminable Interest
6
Office of the Law Revision Counsel. 26 USC 2044 – Certain Property for Which Marital Deduction Was Previously Allowed
7
Office of the Law Revision Counsel. 26 USC 2056A – Qualified Domestic Trust
8
Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
9
Internal Revenue Service. About Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return
10
Internal Revenue Service. Instructions for Form 706
11
eCFR. 26 CFR 20.6081-1 – Extension of Time for Filing the Return