Pub. date: 3/26/07
What it is
This 36-page Special Report first gives a basic road map to the federal estate tax marital deduction, then explains in detail the options available for making retirement benefits qualify for that deduction. The second half of the Report explains the special difficulties that arise in qualifying for the marital deduction when a retirement plan or IRA is left to a surviving spouse who is not a U.S. citizen.
The Report explains: The requirements that must be met for a bequest to qualify for the federal estate tax marital deduction; the most common types of marital deduction trust (the “general power trust” and the “QTIP trust”); permitted methods of satisfying the all-important requirement that the surviving spouse must be “entitled for life to all of the income” of the marital trust; how (and whether) you can use these methods for a retirement plan that is payable to a trust; and what “income” the spouse is entitled to when the trust’s asset is a retirement plan.
The Report also explains the extra requirements that must be met to obtain the marital deduction for benefits left to a noncitizen spouse, discusses four different approaches for meeting those requirements, and offers suggestions for investment and administration of a “QDOT” containing retirement benefits.
Who needs it?
You need this Special Report if: You are doing an estate plan in which retirement benefits will be left to a noncitizen surviving spouse, you want the benefits to qualify for the federal estate tax marital deduction, and you don’t own a copy of the 5th edition (2003) of the author’s book Life and Death Planning for Retirement Benefits. You might also find this Report useful if you want a more in-depth discussion of the background of the federal estate tax marital deduction than is offered in Life and Death Planning for Retirement Benefits (6th ed. 2006).
If you already own the 5th ed. (2003) of Life and Death Planning for Retirement Benefits, don’t buy this Report, because this report is basically the same as ¶ 3.3 and Chapter 4 of that book (updated for Rev. Rul. 2006-26).