[WSBAPT] Use of IRC Sec 2519

[Sam Furgason]

I am considering using the "all inclusive" provisions of IRC Sec 2519 to
make a partial gift of a QTIP trust inuerest, the purpose of which is to
make a gift of the entire interest per the Code. The scenario is that the
client's estate is less than the federal exemption amount even when the
QTIP trust is included, but would be less than the Washington exemption if
the QTIP trust amount were excluded. The idea is to gift a fractional
interest in the income interest of the QTIP trust, thereby triggering a
gift for federal tax purposes of the entire QTIP, corpus and interest. The
gift will not exceed the federal exemption amount of $5,340,000,
generating no federal tax, but will remove the QTIP amount from the
survivor's estate as having  been part of a lifetime gift, which is not
subject to Washington estate tax. Meanwhile the surviving spouse receives
the rest of the income for life, but does not have to include the QTIP
interest in his or her taxable estate for Washington estate tax purposes.
Anyway, that's the idea. 

Any comments or insights as to the use of this technique would be
appreciated.

Sam Furgason
  _____  


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