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PARRIS N. GLENDENING, Governor
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Ch. 292
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life, or other temporary interest in a trust or other assets and, under a tax law of the
United States, the personal representative or other person acting in a fiduciary
capacity for the deceased maker of the will or other instrument is given an election to
treat administration expenses of the estate of the decedent paid from or chargeable to
the principal of the trust or other assets either as income tax deductions or estate tax
deductions, and the fiduciary elects to treat the expenses in whole or in part as
income tax deductions, with the result that estate taxes imposed under the law and
paid from or chargeable to principal are greater than if the contrary election had been
made, an amount equal to the difference in estate taxes shall be reimbursed to
principal from the income of the trust or other assets.
(b) Unless otherwise expressly provided by a will or other controlling
instrument, under which a gift is made to or for the benefit of the surviving spouse of
the decedent which qualifies for an estate tax marital deduction under the tax law of
the United States and the amount or size of the gift is defined by the terms of the will
or other controlling instrument in terms of the maximum marital deduction allowable
under the tax law, no adjustment is required to be made between the gift and the
other interests in the estate of the decedent, or governed by the instrument, because
of:
(1) An increase in the amount or size of the gift resulting from an
election by the fiduciary, under the tax law, to treat estate administration expenses as
income tax deductions over the amount or size of the gift had the contrary election
been made, or
(2) Any increase or decrease in the amount or size of the gift resulting
from an election by the fiduciary, under the tax law, of an estate tax valuation date
other than the date of the death of the decedent as compared with the amount or size
of the gift had the contrary election been made.
(c) ] Unless otherwise expressly provided by a will or other controlling
instrument, under which a gift is made to or for the benefit of the surviving spouse of
a decedent which qualifies for an estate tax marital deduction under the tax law of
the United States and the amount or size of the gift is defined by the terms of the will
or other controlling instrument in terms of the maximum marital deduction allowable
under the tax law, the definitions do not constitute a direction by the decedent to the
fiduciary to exercise an election respecting the deduction of estate administration
expenses or the determination of the estate tax valuation date, which the fiduciary
may have under the tax law, only in a manner as will result in a larger allowable
estate tax marital deduction than if the contrary election had been made.
[(d)] (B) (1) In this subsection the following words have the meanings
indicated.
(i) "Marital deduction formula clause" means any provision of a
will or other controlling instrument that makes a bequest or transfer, the size or
amount of which is determined in whole or in part with reference to the amount
allowable to a decedent's estate as a marital deduction under the tax law of the
United States.
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- 1701 -
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