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2009 -- S 0217 | |
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LC00478 | |
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STATE OF RHODE ISLAND | |
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IN GENERAL ASSEMBLY | |
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JANUARY SESSION, A.D. 2009 | |
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____________ | |
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A N A C T | |
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RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES -- LIABILITY AND | |
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COMPUTATION | |
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Introduced By: Senator John F. McBurney | |
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Date Introduced: February 04, 2009 | |
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Referred To: Senate Judiciary | |
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It is enacted by the General Assembly as follows: | |
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SECTION 1. Chapter 44-22 of the General Laws entitled "Estate and Transfer Taxes - |
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Liability and Computation" is hereby amended by adding thereto the following section: |
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44-22-1.2. Construction of wills and trusts containing formula marital clauses. – (a) |
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If a testator or settlor, under the terms of a governing instrument executed prior to September 12, |
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1981, leaves outright to or in trust for the benefit of that testator's surviving spouse an amount or |
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fractional share of that testator's or settlor's estate or a trust estate expressed in terms of one-half |
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(1/2) of that testator federal adjusted gross estate, or by any other reference to the maximum |
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estate tax marital deduction allowable under federal law without referring, either in that |
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governing instrument or in any codicil or amendment thereto, specifically to the unlimited federal |
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estate tax marital deduction enacted as part of the Economic Recovery Tax Act of 1981, such |
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expression shall, unless subsection (b) or (c) of this section applies, be construed as referring to |
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the unlimited federal estate tax marital deduction, and also as expressing such amount or |
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fractional share, as the case may be, in terms of the minimum amount which will cause the least |
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other property passing to the surviving spouse that qualifies for the marital deduction at the value |
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at which it qualifies, and also taking into account all credits against the federal estate tax, but only |
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to the extent that the use of these credits do not increase the estate taxes payable. |
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(b) If this subsection applies to a testator or settlor, such expression shall be construed as |
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referring to the estate marital deduction allowed by federal law immediately prior to the |
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enactment of the unlimited estate tax marital deduction as part of the Economic Recovery Tax |
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Act of 1981. This subsection applies if subsection (c) of this section does not apply and: |
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(1) The application of this subsection to the testator or settlor will not cause an increase in |
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the federal estate taxes payable as a result of the testator's or settlor's death over the amount of |
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such taxes which would be payable if subsection (a) of this section applied; or |
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(2) The testator or settlor amended the governing instrument containing such expression |
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after December 31, 1981, without amending such expression to refer expressly to the unlimited |
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federal estate tax marital deduction. |
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(c) If the governing instrument contains language expressly stating that federal law of a |
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particular time prior to January 1, 1982, is to govern the construction or interpretation of such |
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expression, the expression shall be construed as referring to the marital deduction allowable under |
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federal law in force and effect as of that time. |
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(d) If subsection (b) or (c) of this section applies to the testator or settlor, the expression |
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shall not be construed as referring to any property that the executor of the testator's or settlor's |
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estate or authorized fiduciary elects to qualify for the federal estate tax marital deduction as |
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qualified terminable interest property. If subsection (a) of this section applies to the testator or |
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settlor, any provision shall be construed as referring to any property that the executor of the |
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testator's or settlor's estate or other authorized fiduciary elects to qualify for the federal estate tax |
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marital deduction as qualified terminable interest property, but only to the extent that such |
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construction does not cause the amount or fractional share left to or for the benefit of the |
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surviving spouse to be reduced below the amount that would pass under subsection (b) or (c) of |
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this section, whichever is applicable. |
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(e) This section is effective with respect to testators and settlors dying after December 31, |
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1981. |
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SECTION 2. This act shall take effect upon passage and shall apply to the estates of |
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decedents dying after December 31, 1981. |
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LC00478 | |
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EXPLANATION | |
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BY THE LEGISLATIVE COUNCIL | |
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OF | |
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A N A C T | |
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RELATING TO TAXATION -- ESTATE AND TRANSFER TAXES -- LIABILITY AND | |
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COMPUTATION | |
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*** | |
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This act would provide that wills and trusts executed prior to September 12, 1981 that |
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contain marital deductions formula clauses shall be constructed and interpreted in a manner that |
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would provide for the optimum federal estate tax marital deduction. |
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This act would take effect upon passage and would apply to the estates of decedents |
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dying after December 31, 1981. |
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LC00478 | |
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