Maryland Wills & Trusts: August 2006 Summary

Legal Developments

New State QTIP Election

aryland legislation now provides expressly for a separate Maryland QTIP election.  See Section 7-309 of Maryland's Tax-General Article, effective on July 1, 2006 and applicable to decedents dying after December 31, 2005.  The election may be made on a timely filed Maryland Estate Tax Return, even if no federal QTIP election is made.  Questions 283 and 284.

Updated Product Features

New Option to Include Statement that Children Not from the Current Marriage are from a Prior Marriage

When either spouse has children who are not from the current marriage you may now include a statement, when appropriate, that these children are from a prior marriage.  New Questions 62 and 68.

GRAT Deferral of Annuity Payment Language Clarified

The optional provision allowing deferral of GRAT annuity payments has been revised to clarify when the 105 day deferral period allowed by Treas. Reg. §25.2702-3(b)(4) is available.  Question 127.

New Options to Specify “5 and 5” Withdrawal Rights

The 5 and 5 provisions now allow you to specify a fixed dollar limit without any associated percentage limit.  The long form also allows you to specify whether the controlling limit will be the greater or lesser of the dollar limit and the percentage limit.  These changes allow greater customization of the withdrawal provisions where the value of the trust is high.  Questions 330-333, 407-410, 455-458, 507-510 and 552-555; New Questions 334, 411, 459, 511 and 556.

Fiduciary Powers Language Modified to Accommodate Two UMTA Custodians

In the specification of the optional fiduciary power “Indirect Distributions” the phrase "The Uniform Transfers to Minors Act custodian" has been replaced with "A Uniform Transfers to Minors Act custodian" to accommodate the change to the Maryland Uniform Transfers to Minors Act which now allows two custodians.  Questions 887 and 888.

New “Auto-Year-End-Update” Feature for Tax Numbers in Law & Strategy

When the your computer’s clock rolls over to 2007 the tax numbers displayed in Law and Strategy such as the Applicable Exclusion Amount, the GST Exemption and the Maximum Estate Tax Rate, will automatically change to reflect the 2007 amounts.  Note that as a side effect of this convenience it is now important to make sure that your computer’s date is correct in order to display Law & Strategy for the current year.

Tab Key Function Restored

The December 2005 update upgraded the user interface to incorporate the latest version of

Java, which improves both stability and appearance.  The Tab key was disabled as a result

of the Java upgrade.  The tab key function has now been restored.  The tab key will now

advance to the next question where multiple questions appear on the same screen.