- 18 - In construing this regulation, courts have explained that “the ‘test’ of whether assets pass from the decedent for estate tax purposes is ‘whether the interest reaches the spouse pursuant to state law, correctly interpreted--not whether it reached the spouse as a result of good faith, adversary confrontation.’” Estate of Carpenter v. Commissioner, 52 F.3d 1266, 1273 (4th Cir. 1995) (quoting Ahmanson Found. v. United States, 674 F.2d 761, 774 (9th Cir. 1981)), affg. T.C. Memo. 1994-108. A settlement must be based on valid, enforceable rights under the will and State law at the time the settlement was reached in order for property received thereunder to qualify for the marital deduction. Id.; see also Estate of Hubert v. Commissioner, 101 T.C. 314, 319 (1993), affd. 63 F.3d 1083 (11th Cir. 1995), affd. 520 U.S. 93 (1997). The principle just enunciated is a corollary to the general rule that “Qualification for the marital deduction must be determined as of the time of * * * death.” First Natl. Exch. Bank v. United States, 335 F.2d 91, 92 (4th Cir. 1964). Accordingly, in situations such as that now before the Court, “the proper focus is on the rights a widow received under the terms of the testamentary * * * [instrument], not on any subsequent rights she may have received from the settlement agreement itself.” Estate of Carpenter v. Commissioner, supra at 1273.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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