In a recent decision, the Tax Court concluded that an interest passing to a surviving spouse under a trust instrument qualified for a marital deduction where the interest was vested indefeasibly on the date of death but might have no value. The author suggests that the Internal Revenue Service attack upon this estate plan was based upon mistakenly equating terminable interest with terminable value-a confusion which has existed at least since the issuance of Revenue Procedure 64-19 in 1964.
David R. Rogol,
Funding of Marital Deduction Trusts Through Equalization Clauses: Confusing Concepts of Terminable Value and Terminable Interest,
32 U. Miami L. Rev.
Available at: http://repository.law.miami.edu/umlr/vol32/iss2/10