Marital Deduction

For purposes of the federal transfer tax, you can - during your lifetime, or at death - give an unlimited amount of wealth to your spouse tax-free. This can be a great advantage, but may not be the panacea that it is often described as.

The disadvantage is that, although you can transfer any amount that you want to your spouse, if your spouse survives you (and does not remarry), there will be no marital deduction available to lessen the estate tax liability at his or her later death. For this reason, it's often a good idea not to give everything to the spouse outright, but to use a credit shelter bequest.