Marital deduction planning is the process of intentionally structuring estate plans to take advantage of the unlimited marital deduction while also preserving or maximizing use of each spouse's estate and gift tax exemption. It typically involves deciding which assets should pass outright to a surviving spouse, which should fund marital trusts such as Q TIPs, and which should be directed to credit shelter or bypass trusts for children or other beneficiaries. Effective marital deduction planning balances spousal financial security with long term tax efficiency and control over ultimate wealth distribution.

In practice, advisors work with attorneys and CPAs to implement marital deduction planning for married couples with moderate to high net worth. They review existing wills, trusts, and beneficiary designations to identify whether plans rely solely on the marital deduction or also use credit shelter strategies. Life insurance is frequently integrated to create liquidity for estate taxes at the second death, equalize inheritances when illiquid assets such as a business or real estate pass to one heir, or enhance what ultimately flows to children while assets pass to a spouse in trust. Advisors also monitor legislative changes that affect exemption amounts and portability, since these influence whether marital deduction focused plans remain optimal. By understanding marital deduction planning, producers can position life insurance as a flexible tool that supports both spousal protection and multigenerational wealth transfer within an evolving tax environment.