Michigan Laws 14.276 – Split interest trust; applicability of section 14.275(3)(b) and (c)
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Subdivisions (b) and (c) of subsection (3) of section 5 do not apply to a split interest trust if:
(a) All the income interest, and none of the remainder interest, of the trust is devoted solely to 1 or more of the purposes described in section 170(c)(2)(B) of the IRC and all amounts in the trust for which a deduction was allowed under sections 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2) or 2522 of the IRC have an aggregate fair market value not more than 60% of the aggregate fair market value of all amounts in the trust.
Terms Used In Michigan Laws 14.276
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- IRC: means the internal revenue code of 1954 as in effect on January 1, 1970. See Michigan Laws 14.272
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Split interest trust: means a trust for individual and charitable beneficiaries that is subject to section 4947(a)(2) of the IRC. See Michigan Laws 14.272
- Trust: means an express trust created by a trust instrument, including a will. See Michigan Laws 14.272
(b) A deduction was allowed under sections 170, 545(b)(2), 556(b)(2), 642(c), 2055, 2106(a)(2) or 2522 of the IRC for amounts payable under the terms of the trust to every remainder beneficiary but not to any income beneficiary.