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Francaite, provided written consent to the 2003 amendment. Under
the 2003 amendment, the trustee was required to pay, in the
aggregate, 5 percent of the net fair market value of the trust
assets each year to the same noncharitable beneficiaries
designated in the original instrument, with payment to be
allocated among them so as generally to equal the annual payments
specified for each in the original instrument, with any remaining
balance paid in equal shares to Erica and Melissa Rodgerson.5
OPINION
In general, for purposes of determining the estate tax
imposed by section 2001, a deduction is allowed from a decedent's
gross estate for transfers for public, charitable, or religious
uses. Sec. 2055(a). However, this general rule is restricted
for so-called split-interest transfers, wherein an interest in
property passes from the decedent to a charitable beneficiary
while an interest in the same property passes to a noncharitable
beneficiary (for less than adequate and full consideration). See
sec. 2055(e)(2). Where the interest passing to the charitable
beneficiary is a remainder interest, no deduction is allowed
unless the interest is in a trust which is a charitable remainder
5 The 2003 amendment's terms further provided that, in the
event 5 percent of the annual fair market value was insufficient
to satisfy all of the allocations, the allocated payments would
be satisfied according to a designated order until the 5 percent
was exhausted.
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Last modified: May 25, 2011