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made, but it is with respect to less than all of the property
eligible to pass to the marital trust, then only such lesser
portion passes to the marital trust. Property eligible to pass
to the marital trust, but with respect to which no election is
made, remains in the residue of the estate and funds the family
trust. Because the decedent’s wife has no exclusive right for
life to any portion of the income of the family trust, she does
not have a qualified income interest for life in that trust.
Sec. 2056(b)(7)(B)(ii). Thus, property passing to the family
trust cannot qualify as qualified terminable interest property
under section 2056(b)(7)(B)(i).
The authority vested by the decedent in his personal
representative to elect whether to have section 2056(b)(7)(A)
apply determines more than simply the tax consequences of a
predetermined bequest. As between two classes of possible trust
beneficiaries--one class being the beneficiaries of the marital
trust (principally, the decedent’s wife, with an income interest
and a limited right to principal), and the other class being the
beneficiaries of the family trust (the decedent’s wife, children,
and the children of any deceased children, with rights to both
income and principal)--the personal representative has the
authority to determine which class immediately will enjoy (i.e.,
which trust will receive) the property. The personal
representative’s authority thus amounts to a power to appoint the
property between the two trusts, and the decedent’s wife’s
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