Homer and Laura are husband and wife. At the time of Homer's prior death in 2013, they owned the following: land as tenants by the entirety worth $2,000,000 (purchased by Homer) and stock as equal tenants in common worth $3,000,000 (purchased by Laura). Homer owns an insurance policy on his life (maturity value of $1,000,000) with Laura as the designated beneficiary. Homer's will passes all his property to Laura. How much marital deduction is allowed Homer's estate?

Question

Quizplus · Accepted Answer

The marital deduction is allowed for the value of property passing from the decedent to the surviving spouse. In this case, the property passing to Laura includes the land held as tenants by the entirety, which is not included in Homer's estate, and the stock held as tenants in common, which is included in Homer's estate. The value of the land is $2,000,000, and the value of the stock is $3,000,000. Therefore, the total value of the property passing to Laura is $5,000,000. The marital deduction is limited to the value of the property passing to the surviving spouse, so the marital deduction allowed for Homer's estate is $3,500,000.

Homer and Laura Are Husband and Wife