Tennessee § 32-3-108 - Marital deduction.

§ 32-3-108. Marital deduction.

IF, A decedent dies after December 31, 1981; Leaving a will executed, or a trust created, before September 12, 1981, that contains a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by federal law; The formula referred to in subdivision (a)(1)(B) was not amended to refer specifically to an unlimited marital deduction under federal law at any time after September 12, 1981, and before the death of the decedent; The will or trust also contains a bequest to, or in trust for the benefit of, the decedent's spouse that qualifies as qualified terminable interest property pursuant to § 2056(b)(7) of the Internal Revenue Code (26 U.S.C. § 2056(b)(7));(2) THEN, the formula referred to in subdivision (a)(1)(B) shall be construed to refer to the unlimited marital deduction allowable by federal law as amended by subsection (a) of § 403 of the Economic Recovery Tax Act of 1981; provided, that the formula shall not be effective as to, or be deemed to, convey and transfer to the decedent's spouse, a sum in excess of the greater of: Two hundred fifty thousand dollars ($250,000); or Fifty percent (50%) of the value of the adjusted gross estate of the decedent as defined in § 2056(c)(2) of the Internal Revenue Code (26 U.S.C. § 2056(c)(2)) prior to its amendment by the Economic Recovery Tax Act of 1981;so that such qualified terminable interest property, as well as the property passing to the spouse pursuant to the formula clause, will qualify for the unlimited marital deduction under § 2056 of the Internal Revenue Code (26 U.S.C. § 2056(b)(7)), but the amount of property passing to the spouse under the formula clause shall not be increased or decreased from what would have passed thereunder prior to the enactment of the Economic Recovery Tax Act of 1981; Notwithstanding subdivision (a)(1)(D), the formula referred to in subdivision (a)(1)(B) will be effective as to or deemed to convey and transfer to the decedent's spouse an unlimited sum, if the court having jurisdiction over decedent's probate estate determines in a proceeding in which all beneficiaries of the estate are represented, that based on all the facts and circumstances the decedent intended or would have intended that the formula should be applied so as to take advantage of the unlimited marital deduction allowed by federal law as amended by subsection (a) of § 403 of the Economic Recovery Tax Act of 1981. This subdivision (a)(3) shall apply only for decedents whose deaths occur after September 12, 1981, and prior to October 1, 1983, and, therefore, shall in no way affect the computation of the amount deductible for Tennessee inheritance tax purposes pursuant to § 67-8-315(a)(6) . For a decedent dying before January 1, 2016, this section shall in no way affect the computation of the amount deductible for Tennessee inheritance tax purposes pursuant to § 67-8-315(a)(6) prior to October 1, 1983. Acts 1983, ch. 26, § 1; T.C.A., § 32-309; Acts 1987, ch. 322, § 22; 2017, ch. 290, § 10. Code Commission Notes. Acts 2017, ch. 290, § 16 provided that section 10 of the act, which amended this section, should take effect January 1, 2017. However, since a public chapter cannot become effective on a date prior to becoming law, the code commission deems the amendment by that act to take effect on July 23, 2017, in accordance with Tenn. Const. art. II, § 20. See Opinion of the Attorney General, June 25, 1982 (OAG 82-191). Compiler's Notes. Section 403 (a)(1)(A) of the Economic Recovery Act of 1981, P.L. 97-34, deleted 26 U.S.C. § 2056(c) and redesignated its (d) as (c). Section 403(a) of the Economic Recovery Tax Act of 1981, referred to in this section, is codified generally in 1 U.S.C. § 101 et seq., and in titles 10, 13 and 46. Amendments. The 2017 amendment substituted “For a decedent dying before January 1, 2016,” for “This” at the beginning of (b). Effective Dates. Acts 2017, ch. 290, § 16. July 23, 2017. See the Code Commission Notes. Law Reviews. Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).