Married couples receive some estate tax protections and benefits. Spouses can transfer their assets to each other without incurring estate taxes. This is true regardless of how much the first spouse transfers to the second upon death. A husband could transfer millions of dollars in property and assets to his wife, or vice versa, without estate taxes being assessed.
Married couples also get the benefit of being able to transfer their federal excludable limits. The federal government allows for each person to transfer $5.45 million in excludable assets (as of 2016) before estate taxes are assessed. If the first spouse to pass away doesn’t use his or her $5.45 million because the entire amount of money is transferred to the spouse, then the spouse who inherited now has his or her own $5.45 million exemption and the deceased’s spouses.
The last surviving spouse could thus transfer $10.9 million in assets. This could be a substantial benefit in tax planning, because a couple could coordinate together in order to maximize the total value of assets that they can pass on to children or other loved ones without estate taxes being incurred. Find out more about estate tax rules for married couples.