Marital Deduction: Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated September 2026.

The marital deduction is the federal estate and gift tax rule that lets a person leave or give an unlimited amount to a spouse who is a United States citizen without triggering estate or gift tax. It defers the tax rather than eliminating it, since the assets are usually taxed again in the surviving spouse’s own estate.

How it works in California

The marital deduction comes entirely from federal tax law, not California law. Under 26 U.S.C. § 2056(a), property that passes from a decedent to a surviving spouse and is included in the decedent’s gross estate qualifies for a deduction equal to its value, which is what makes transfers to a citizen spouse effectively unlimited for federal estate tax purposes.

The deduction does not apply automatically when the surviving spouse is not a United States citizen. Under 26 U.S.C. § 2056(d), the marital deduction is disallowed for a noncitizen spouse unless the property passes through a qualified domestic trust, often called a QDOT, which holds the assets and defers the tax the same way an outright transfer to a citizen spouse would.

Why it matters

Deferral is not the same as elimination, and planning around the marital deduction has to account for the second death. For example, a married couple leaves everything outright to whichever spouse survives, relying entirely on the marital deduction to avoid tax at the first death; if the surviving spouse’s own estate is large enough, that spouse’s death can still trigger estate tax that better planning, such as a bypass trust or a portability election, could have reduced.

Common mistakes

Treating the marital deduction as a way to avoid estate tax permanently instead of a way to defer it. Leaving property outright to a noncitizen spouse without a QDOT, which can disallow the deduction entirely. Assuming the marital deduction is available for a domestic partner the way it is for a legally married spouse; the federal deduction is tied to marriage.

Related terms

• QTIP Trust: a trust structure built to qualify for the marital deduction while still controlling where the property goes after the surviving spouse dies.
• Portability: a separate federal election that can preserve a deceased spouse’s unused exclusion alongside the marital deduction.
• Bypass Trust (AB Trust): a planning tool that shelters the first spouse’s exclusion using something other than the marital deduction.
• Survivor’s Trust: the share of a married couple’s trust the marital deduction is not needed for, since it already belongs to the surviving spouse.
• Generation-Skipping Transfer Tax: a separate federal tax that can still apply to marital deduction property later, when it passes to a skip person.
• Charitable Remainder Trust: uses a different federal deduction, for a charitable interest rather than a marital one.

Part of the California estate planning glossary.