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At your request, we have revised our previous
drafts to include a so-called Family Residuary Trust.
This trust could also be called a "bypass" or
"disclaimer" trust. As I explained to you over the
phone, it will allow the surviving spouse to analyze
the family financial situation for a 9-month period
following the deceased spouse's date of death. The
surviving spouse can then make a decision regarding how
much money it would be prudent to direct into this
trust for tax planning purposes. The 9-month period
gives the surviving spouse ample time to consult with
us and other financial advisers and to make a decision.
This type of arrangement allows maximum flexibility in
formulating your estate plan.
What Mr. Kadish was referring to, of course, was the use of a
disclaimer by the survivor of the first to die to cause an amount
in the predeceasing spouse's estate up to the amount of the
unified credit to pass for the benefit of Dale and thus reduce
the taxable estate of the survivor for Federal estate tax
purposes.
Relying on Mr. Kadish's advice that they did not have to
decide during their lifetimes whether to use the unified credit
in their wills, on January 25, 1988, decedent and Mrs.
Chamberlain executed the mutual wills1 that Meyer & Wyse had
prepared for them. These wills were consistent with the points
made by Mr. Kadish in his January 14, 1988, letter. In her will,
Mrs. Chamberlain made a $75,000 specific bequest to Dale and
1 The use of the term "mutual wills" does not imply that the
wills were executed pursuant to any type of contract. See McGinn
v. Gilroy, 165 P.2d 73 (Or. 1946); Dukeminier & Johanson, Wills,
Trusts & Estates 292 (3d ed. 1984).
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Last modified: May 25, 2011