Paralegal Advanced Competency Exam (PACE) Practice Exam 2025 - Free PACE Practice Questions and Study Guide

The primary benefit of a marital deduction trust lies in its ability to reduce federal estate tax liabilities. This type of trust allows one spouse to transfer assets to the other spouse without incurring an immediate estate tax, effectively deferring the tax liability until the death of the surviving spouse. By utilizing the marital deduction, estates can avoid a significant tax burden at the first spouse's death, allowing for the preservation of the estate's overall value for the surviving spouse and heirs.

While minimizing property distribution disputes can be a key factor in estate planning, that is not the primary purpose of a marital deduction trust. The intent of this trust structure is more focused on tax efficiency rather than conflict resolution among heirs. Similarly, providing for children's education and increasing the estate's overall value are relevant considerations in estate planning but do not capture the fundamental function of the marital deduction, which is primarily centered around tax benefits associated with spousal transfers.