The decedent spouse dies with $18,000,000 and leaves their estate into a marital and credit shelter trust with the standard optimum marital formula for her surviving spouse. She had made $3,000,000 in taxable gifts during life and dies when her Basic Exclusion amount is $10,000,000. How much goes into the Marital Trust?

• A. $3,000,000
• B. $7,000,000
• C. $11,000,000
• D. $18,000,000

Answer: (C)

The key idea is that the decedent’s unused exclusion amount is used to fund a Credit Shelter (Bypass) Trust, while the rest goes to the Marital Trust for the surviving spouse.

The Basic Exclusion amount is 10 million. She made 3 million in taxable gifts during life, so her unused exclusion at death is 10 million minus 3 million, which equals 7 million. That 7 million goes into the Credit Shelter Trust.

The estate totals 18 million, so after funding the Credit Shelter Trust with 7 million, the remaining amount for the Marital Trust is 18 million minus 7 million, which equals 11 million.

Therefore, the Marital Trust receives 11,000,000.