Purchase And Sale Of Marital Trust Assets Did Not Trigger Any Transfer Tax Consequences


Trust and estate litigation often involves issues regarding a QTIP marital trust for which a deduction was taken under Code §2057(b)(7) for estate tax purposes. This comes up often, since such litigation often arises between a surviving spouse who is beneficiary of the QTIP trust, and children of the decedent who are remaindermen and may not be children of the surviving spouse.

Care must be undertaken in dealing with such trusts and their assets in crafting settlements of such disputes. Transfers of interests in such trusts, terminations of such trusts, and other transactions can trigger gift tax consequences, including under Code §2519 (creating a gift tax upon disposition by a surviving spouse of all or part of such spouse’s mandatory income interest in the QTIP).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles (Chuck) Rubin, Gutter Chaves Josepher Rubin Forman Fleisher P.A. | Attorney Advertising

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