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specific exception to the terminable interest rule is necessary
to allow the decedent to make the interest of the surviving
spouse conditional on surviving the decedent by 6 months or
surviving a common disaster. See sec. 2056(b)(3). Other
conditions of survival violate the terminable interest rule.
See, e.g., sec. 20.2056(b)-3(d), Example (4), Estate Tax Regs.
(condition of survival to date of distribution of property
unacceptable).
In Jackson v. United States, 376 U.S. 503 (1964), the
Supreme Court found that a State-law widow’s allowance was a
prohibited terminable interest. The allowance was subject both
to a condition precedent (award by a court) and defeasance
(abatement upon the widow’s death). The Court stated that the
rule uniformly followed is that qualification for the marital
deduction must be determined at the time of death. Id. at 508.
Thus, consider the following hypothetical situation: The
decedent leaves the residue of his estate to his children, except
to the extent that his personal representative lists any portion
of the residue on the estate tax return as going to the wife. On
the authority of the Jackson case, a deduction under section
2056(a) would fail on account of the terminable interest
exception for the portion of the residue going to the wife.
The general rule of section 2056(b) is that contingent
interests are terminable interests. The determination is made at
the time of death. Here, the decedent’s wife’s interest in the
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