Estate of Christiansen v. Commissioner Analyzed

Steve R. Akers (Bessemer Trust, Dallas, Texas) has recently published his article entitled Estate of Christiansen v. Commissioner, RPPT eREPORT (Feb. 2008).

Here are excerpts from the introduction to his article:

The Tax Court reviewed the validity of a formula disclaimer, that operated much in the same manner as defined values clauses, in Estate of Christiansen v. Commissioner, 130 T.C. No. 1 (2008). The court unanimously approved the formula disclaimer to a foundation and rejected the IRS’s arguments that the clause violated public policy[.]***

The case is especially important because of its implications for defined value transfers, in which a transfer is made and allocated between a “taxable” and “non-taxable” portion based on gift or estate tax values. A redetermination of value by the IRS operates much like with a standard marital deduction formula clause, where an increased value allocates a larger value to the surviving spouse but does not generate additional estate tax.***