- 12 -
1991). But where the payouts have not been expressed in the
trust's governing instrument in conformity with section
2055(e)(3)(C)(ii), reformation is permitted only if a judicial
proceeding to make the appropriate changes to the trust is
commenced within 90 days after the due date of the estate tax
return.
The estate has stipulated that the trust, as in effect at
the time of decedent's death, did not qualify as either a CRAT or
a CRUT.10 Consequently, the bequest of the remainder interest to
the diocese will qualify as a deduction under section 2055(a)
only if the remainder interest was a "reformable interest" that
underwent a "qualified reformation". Sec. 2055(e)(3).
The remainder interest to the diocese cannot qualify as a
"reformable interest" because certain payments to be made to the
noncharitable beneficiaries before the remainder vests are not
expressed as either a specified dollar amount or a fixed
percentage of the fair market value of the trust property, as
required by section 2055(e)(3)(C)(ii).11 The provision for the
10 Similarly, because the trust at issue was not maintained
by the diocese, it cannot qualify as a PIF. See sec.
642(c)(5)(E).
11 Respondent also argues that, because the trust instrument
provides for payments to Wanda Rodgerson for "so long as she is
making reasonable progress in pursuit of a Ph.D. in education"
and to Migle Francaite "until she graduates from medical school",
the remainder interest also does not satisfy sec.
(continued...)
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