-54-
The majority seems to imply that Christiansen’s daughter
should be treated as having constructively created and funded the
Trust when she made her disclaimer.6 This is not the right
approach. To treat Christiansen’s daughter as having created the
Trust when she made the disclaimer would involve a series of
convoluted steps, each of which either never occurred or violates
5(...continued)
to a testamentary gift. Such a testamentary gift ordinarily
would be subject to estate tax. To treat the disclaimer in
Walshire as qualified would enable the avoidance of tax on this
transfer. Unlike Walshire, however, the situation here does not
afford an opportunity to avoid tax. The estate has never
disputed its obligation to pay tax on the amount attributable to
the contingent remainder held by Christiansen’s daughter. The
estate seeks a deduction only for the fixed-value annuity to be
used for charitable purposes. This is not akin to a testamentary
gift where tax would be avoided. Moreover, in the event
Christiansen’s daughter does not outlive the term of the Trust,
the corpus will also pass to the Foundation to be used for
charitable purposes. The estate is thus paying tax on the
transfer of some property that ultimately may go to charity.
6The Trust was unfunded at the time of trial and would only
be funded from the disclaimed funds. The estate’s counsel
testified, however, that it is common estate planning practice
not to distribute funds from the estate until matters have been
resolved.
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Last modified: March 27, 2008