Gerzog on “More QTIP Mischief”

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If it weren’t for Wendy Gerzog (Baltimore), I don’t think I would have figured out a way to combine my interests in three subject matters — taxation; wills, trusts and estates; and feminist theory.  Her 1993 article The Marital QTIP Provisions: Illogical and Degrading to Women, 5 UCLA Women’s L.J. 301 (1995) was one of those paradigm-shifting pieces that put me on a long intellectual quest.  So if Wendy Gerzog writes something, I read it.

To grossly over-simplify a complex area of law, electing “QTIP” treatment for certain property allows it to qualify for the estate (and gift) tax marital deduction.  An interest in “QTIP” property is short of full ownership of the property, and Professor Gerzog (and others) are critical of the tax law’s extension of the marital deduction to these transfers.

Professor Gerzog has added another publication to her already-significant body of writing on the QTIP provisions with Morgens: More QTIP Mischief, Tax Notes, Vol. 128, No. 3, 2010.  She writes:

It is the fiction of the QTIP provisions that makes the case so unsatisfying as well as at least somewhat inconsistent with [another marital deduction case]. When the marital deduction is afforded to the first spouse to die even though his widow may not have had any input on the decision to make a QTIP election and needs only to receive an income interest in the trust property, it will always seem fundamentally unfair for the widow to be treated as if she owned the trust property itself. This arrangement can scarcely be described as ‘‘marital’’ and the deferral benefits inuring to third parties (that is, the family of the first spouse to die) are unsupported by the supposed rationale for the marital deduction.

Citations omitted.

This short Tax Notes piece provides a quick overview of the QTIP problem, and is accessible to non-specialists.

-Bridget Crawford

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