Important Reviewed Tax Court Opinion Regarding Early Termination of QTIP Trust; Spouse Did not Make Gift of Remainder Under Section 2519 But Children Made Gift to Spouse.
Assets in QTIP trusts (including their future appreciation) will eventually be subject to transfer tax. The IRS has been attacking under section 2519 several methods used to move trust assets to the spouse so the spouse can plan with the assets to reduce future estate taxes. This important reviewed Tax Court case addresses the early termination of a QTIP trust and holds that the spouse-beneficiary did not make a gift of the remainder interest under section 2519, but the remainder beneficiaries made a gift to the spouse by agreeing that all trust assets could be distributed to the spouse.
