If a marital deduction gift is made in trust, in addition to the other provisions of this chapter, each of the following provisions also applies to the marital deduction trust:

(a) The transferor‘s spouse is the only beneficiary of income or principal of the marital deduction property as long as the spouse is alive. Nothing in this subdivision precludes exercise by the transferor’s spouse of a power of appointment included in a trust that qualifies as a general power of appointment marital deduction trust.

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Terms Used In California Probate Code 21524

  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Internal Revenue Code: means the Internal Revenue Code of 1986, as amended from time to time. See California Probate Code 21500
  • Marital deduction: means the federal estate tax deduction allowed for transfers under Section 2056 of the Internal Revenue Code or the federal gift tax deduction allowed for transfers under Section 2523 of the Internal Revenue Code. See California Probate Code 21520
  • Marital deduction: The deduction(s) that can be taken in the determination of gift and estate tax liabilities because of the existence of a marriage or marital relationship.
  • Property: means anything that may be the subject of ownership and includes both real and personal property and any interest therein. See California Probate Code 62
  • Spouse: includes domestic partner, as defined in Section 37 of this code, as required by §. See California Probate Code 72
  • Statute: A law passed by a legislature.
  • Transferor: means the testator, settlor, grantor, owner, or other person who executes an instrument. See California Probate Code 81
  • Trust: includes the following:

    California Probate Code 82

(b)  The transferor’s spouse is entitled to all of the income of the marital deduction property not less frequently than annually, as long as the spouse is alive. For purposes of this subdivision, income shall be construed in a manner consistent with subdivision (b) of Section 2056 and subdivision (f) of Section 2523 of the Internal Revenue Code and shall include a unitrust payment or other allocation of income determined pursuant to a reasonable apportionment of total investment return that meets the requirements of Section 643 of the Internal Revenue Code and the regulations adopted pursuant to that statute.

(c) The transferor’s spouse has the right to require that the trustee of the trust make unproductive marital deduction property productive or to convert it into productive property within a reasonable time.

(Amended by Stats. 2016, Ch. 140, Sec. 1. (SB 1265) Effective January 1, 2017.)

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