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We note that the Trust serves more than just the settlors'
stated intent to avail themselves of the marital deduction. The
Agreement indicates that a principal purpose for the Trust was to
provide subsistence for the surviving spouse during his or her
competency and, thereafter, to allow the spouse to qualify for
medical assistance at minimal family expense. The Agreement
states that the Trust's assets shall be distributed to the
settlors' children upon the surviving spouse's incompetency, or,
in other words, when the surviving spouse may potentially incur
increased medical expenses for physician care and/or the need for
a nursing home. Because the Trust's assets would be outside the
Trust, they would not be counted as an asset of the surviving
spouse for purposes of ascertaining the amount that he or she
would have to pay for these expenses. Thus, more of the
settlors' assets would pass to the settlors' children.
For the foregoing reasons, we sustain respondent's
disallowance of the estate's marital deduction. In so doing, we
have considered all arguments made by the parties, and, to the
extent not discussed above, find them to be irrelevant or without
merit.
To reflect respondent's concessions,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011