Estate of Willis Edward Clack, Deceased, Marshall & Ilsley Trust Company, Co-Personal Representative, and Richard E. Clack, Co-Personal Representative - Page 42

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          (exercisable by the executor's not making the QTIP election)                
          would be to adopt the test applied by the Court of Appeals for              
          the Sixth Circuit in Estate of Spencer v. Commissioner, 43 F.3d             
          226 (6th Cir. 1995), revg. T.C. Memo. 1992-579, that the date for           
          determining whether property qualifies is the date the QTIP                 
          election is made.                                                           
               However, the holding of the Court of Appeals for the Sixth             
          Circuit, if pursued to its logical conclusion, would prohibit               
          QTIP treatment for any qualifying income interest granted to a              
          surviving spouse if the surviving spouse dies prior to the                  
          executor's making the QTIP election.  In such a situation, if the           
          date for determining whether property qualifies as QTIP is the              
          date the election is made, then the executor of the first spouse            
          to die cannot make the election to treat any property interest as           
          QTIP.  This is because, at the time the executor makes the                  
          election, the surviving spouse has died and no longer has any               
          interest in the property; the property has passed to the                    
          remainder interest.  In that situation, at the time the executor            
          makes the election, the surviving spouse does not have a                    
          qualifying income interest for life, and the second essential               
          element for QTIP treatment cannot be met.  In such situation, the           
          spouses could lose the benefit of the surviving spouse's unified            
          credit.1  I do not think that the date of making the election is            

          1  For example, assume husband is the first to die and leaves               
          wife a qualifying income interest in his entire estate, which               
          estate is valued at $1.2 million.  Assume further that wife dies            
                                                             (continued...)           



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