IRC Section 2056 creates the federal estate tax marital deduction, allowing an estate to claim a deduction for qualifying transfers to a surviving spouse who is a United States citizen. In many traditional estate plans, the marital deduction allows estate tax to be postponed until the second spouse's death by passing assets outright to the survivor or in qualifying interests such as certain joint property or a QTIP trust. In the life insurance context, Section 2056 affects how death proceeds are directed at the first spouse's death, including whether policies should be individually owned, held in a marital trust, or owned by an irrevocable life insurance trust designed to benefit the surviving spouse and descendants. While the marital deduction can eliminate estate tax at the first death, it does not reduce the overall taxable estate; instead, it shifts the tax calculation to the surviving spouse's estate, requiring careful coordination with exemption planning, portability, and long-term wealth transfer objectives.

In day-to-day planning, advisors use IRC Section 2056 when helping married clients decide how much to leave outright to a surviving spouse versus how much to shelter in a credit shelter or bypass trust. A common pattern is to fully use the deceased spouse's applicable exclusion amount in a bypass trust while leaving the balance to a spouse in a form that qualifies for the marital deduction, often including life insurance proceeds. QTIP trusts funded at the first death, possibly supplemented by ILIT-owned insurance for liquidity, can give the surviving spouse income and access while preserving principal for children or other beneficiaries. Advisors also consider portability of the deceased spouse's unused exclusion amount and how it interacts with marital deduction planning. In blended families, Section 2056 is used to balance support for a surviving spouse with inheritance goals for children from prior relationships. Understanding 2056 helps producers and planners integrate life insurance, trusts, and titling decisions into a cohesive estate plan.