As noted earlier, every individual is entitled to transfer up to a certain amount of property (the exclusion equivalent) without estate taxation. In 2009, that amount wa $3.5 million. The individual who simply transfers ownership of all property to a surviving spouse gives up that benefit.
In many situations, a better alternative to passing all property to a surviving spouse under the marital deduction would be to first transfer property, equal to the exclusion equivalent, to a trust. A credit trust (reviewed shortly) is typically used for this purpose. With those assets protected from estate taxation, the remainder of the first spouse's property can be transferred to the surviving spouse.
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