Estate of Merle Allen Whiting, Jr., Deceased, Vicki Ann Whiting, Executrix - Page 11

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               payments.  This section does not limit the Trustee’s                   
               powers and must be construed to enable the Trustee to                  
               give each beneficiary the fullest possible benefit and                 
               enjoyment of all of the trust income and principal to                  
               which the beneficiary is entitled.                                     
                    5.   State Law                                                    
               Section 27 of the trust agreement, “Applicable Law”,                   
          provides that all questions concerning construction, validity,              
          and administration of the trust shall be determined in accordance           
          with Arkansas law.                                                          
               A.   Applicable Law                                                    
                    1.   Marital Deduction                                            
               Section 2001 imposes a tax on the transfer of the taxable              
          estate of all decedents who are citizens or residents of the                
          United States.  The amount of the tax is determined, in part, by            
          the value of the taxable estate.  Sec. 2001(b).  Section 2051               
          defines the value of the taxable estate as the gross estate less            
          deductions.  “For estate taxes, as for income taxes, ‘Deductions            
          are a matter of legislative grace, and a taxpayer seeking the               
          benefit of a deduction must show that every condition which                 
          Congress has seen fit to impose has been fully satisfied.’”                 
          Estate of Nicholson v. Commissioner, 94 T.C. 666, 681-682 (1990).           
               Pursuant to section 2056(a), the estate may claim, as a                
          marital deduction, the value of property passing to the surviving           
          spouse.  As a general rule, the marital deduction is denied for a           

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Last modified: May 25, 2011