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2001 Annual Meeting Wednesday, January 3, 2001 - Saturday, January 6, 2001 San Francisco, California |
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2001 Annual Meeting Wednesday, January 3, 2001 - Saturday, January 6, 2001 San Francisco, California |
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Saturday, January 6, 2001, 10:30 a.m.–12:15 p.m. Section on Donative Transfers, Fiduciaries and Estate Planning The Popular QTIP Marital Deduction: Sexism in Estate Planning? |
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VALUE OF QUIP TRUST TO SURVIVING SPOUSE A trustee is under a duty to be impartial, meaning that the interests of the income beneficiary and remainder must be balanced. Thus, the corpus must be preserved against erosion from inflation, which means that part of the economic return (namely, net appreciation) is allocated to the remainder. The trustee accomplishes this by investing roughly on a 50-50 basis between fixed-income debt obligations and equities. Trustees will usually invest conservatively. The average "income" yield of a trust is about 3-4%. The applicable federal mid-term rate for November 2000 was very close to 6%.
The valuation of unitrust interests under Schedule D of IRS Pub. 1457 appears to be independent of any discount rate. As of age 15, women have a life expectancy that is 6.5 years greater than for men. As of age 60, this gap has fallen to 3.6 years. The median for men at this time of 1st marriage is 1.9 years greater than for women. The difference on 1st remarriage is 3.2. Accordingly, and directly, it would seem that the median period of survival would be somewhere in the 6-9 year range. |
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