Agreement among beneficiaries not to probate will caused loss of marital deduction
Article Abstract:
The IRS in TAM 9610004 ruled that an agreement among a decedent's spouse and children not to probate the decedent's will and instead to rely on local laws regarding intestacy resulted in a loss of the marital deduction for the estate. For the marital deduction to be granted in such cases, it is required that the assignment or surrender of interests take place at arms length, that such issues in courts must be of an adversarial nature and that all claims be enforceable. The IRS ruled that, in this case, the disclaimer was not valid due to a lack of enforceability and no arms' length standard.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1996
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Trust was QTIP though spouse did not get stub income
Article Abstract:
The US Court of Appeals for the 11th Circuit ruled in Estate of Shelfer that the fact that a trust did not provide the second-to-die spouse with control over stub income did not alter the qualified terminable interest property (QTIP) trust election made by the estate of the first spouse. The trust's stub income is the income that is earned between the last distribution before the second spouse's death and the date of death. The Court found that this interpretation promoted certainty, was consistent with Congressional intent and would not encourage disclaimer of QTIP elections.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1996
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No deduction for bequest to spouse and charities
Article Abstract:
The US District Court in Wisconsin ruled in Roels that the marital deduction and qualified terminable interest property treatment did not apply to a trust established by the decedent that paid all income to the surviving spouse until she died or remarried, at which time the corpus would pass to charity. The remarriage contingency disqualified the trust for QTIP treatment and for the marital deduction, and the spouse's life interest made charitable deductions inapplicable. The Court also found that the trust was not a charitable remainder annuity trust or unitrust.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
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