How are the assets of a Marital Trust taxed?

Whether a marital trust must be included in the surviving spouse's estate depends on a couple of factors, including (1) how the trust is set up and (2) whether a marital deduction was received for the value of the assets that went into the trust when it was originally funded. I can't answer that based on the information you've provided. Just going by the names you've given, I would guess there may have been a marital deduction taken for 1 and 3, and maybe not one for 2 (the GST Exempt Non-Qualifying trust). But I would need to know a whole lot more information before I could say that for sure. If a marital deduction against gift or estate taxes was taken when a trust was created, then the assets in it will be includible in the spouse/beneficiary's estate at her death. If no marital deduction was taken, then whether the trust assets will be includible in the spouse/beneficiary's estate or not depends on what rights the spouse/beneficiary had at death or during life. If the spouse/beneficiary had what is called a general power of appointment with regard to the trust assets, which can arise in a variety of ways, then it will be includible even if no marital deduction was taken. If there is not a general power of appointment held by the spouse/beneficiary, however, then there should be no inclusion if there was no marital deduction, but if there was one, then there will likely be inclusion. The best way to be sure is to have the whole situation reviewed by a good attorney.