Ninth Circuit upholds QTIP despite trust provision permitting accumulation of income
Article Abstract:
The Ninth Circuit judges in Estate of Ellingson have allowed a marital deduction for a QTIP trust even though the trustee was allowed to accumulate income. The judges held that the testator wanted the QTIP to be a marital trust which could take the Section 2056(b)(7) deduction. One QTIP requirement is that surviving spouses enjoy all the income from the trust for the rest of their lives, and the court agreed with the estate that the trustee could not accumulate any income since the trust was from the outset designed as a marital deduction trust.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1992
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CA-5 reverses Tax Court and upholds QTIP despite executor's discretion to make the election
Article Abstract:
The Fifth Circuit in Estate of Clayton ruled that property going to a surviving spouse qualified for the qualified terminable interest property (QTIP) election even though that property would go to a trust in which the spouse did not have the sole interest if that election were not made. The Court based its decision on the legal meaning of the will and of IRC 2056, noting legislative intent to provide maximum flexibility in postmortem estate planning.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1993
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