The answer depends on the total value of the marital taxable base. The marital taxable base is the sum of the husband's taxable base and the wife's taxable base. Again, for the purpose of simplicity, the unified credit exclusion is referred to as your savings account amount.

For instance, using the anticipated $1 million exclusion for 2011 as the example, assume the husband has a taxable base of $750,000. Assume the wife has a taxable base of $500,000. If the husband leaves all of his property to the wife, his estate will have a zero taxable base because his estate subtracts the $750,000 left to his wife. The husband did not use any of his exclusion. Now his wife dies. If she does not reduce her assets while living, her taxable base is $1.25 million ($750,000 received from her husband plus her own $500,000 taxable base). Her estate exceeds the exclusion amount by $250,000, which will be subject to taxes at the estate tax rate in her year of death (rates up to 55 percent in 2011 unless Congress makes another change!).

Again, using $1 million as the exclusion amount, assume the husband left $500,000 to his wife outright, and $500,000 of property in a way that his wife could have the benefit of the property but did not own it outright. Then, when his wife died, her taxable base would be $1 million ($500,000 received outright from her husband and her own $500,000 taxable base).

Chapter 18 will show you how the extra $500,000 in this example can be directed for the benefit of the surviving spouse, but not be included in her taxable base.

In the preceding example, the surviving spouse at her death would use her own $1 million savings account to offset any transfer taxes owed. Assuming the exemption is still $1 million in the year of her death, her estate would owe no taxes.