Thursday, March 18, 2010
- Under the bill, personal representatives and trustees must apply the federal estate tax laws that were in effect on December 31, 2009, to wills and trusts that use a formula clause based on the presence of a federal estate tax to fund two separate trusts.
- The bill makes changes to both the probate code and the trust code and contains a detailed list of tax references that will trigger application of the new law.
- The bill applies to deaths occurring in 2010 and is retroactive to December 31, 2009.
- If Congress reinstates the federal estate tax in 2010, the bill will be effective through the date that the new federal estate tax law goes into effect.
- The bill does not apply to wills or trusts that address what to do if there is no federal estate tax.
- The bill also allows certain interested persons to initiate a proceeding to determine whether the decedent intended for the tax laws in effect on December 31, 2009, to apply.
Other states are also considering a tax fix statute similar to the one enacted in Indiana.
See Senate Bill 65; see also my prior post States Scramble to Clean up the Impact of the Federal Estate Tax Hiatus.
Special thanks to Sean J. Fahey (attorney, Indianapolis) for bringing this to my attention.