Integration of Exempt and Nonexempt Dispositions

• Author: Jerold I. Horn
• Profession: Lawyer
• Pages: 537-547

537

Some of the forms in this chapter are usable to integrate (i) the division of a trust estate

into a GST-exempt portion (“Portion One”) and a GST-nonexempt portion (“Portion

Two”) with (ii) preferential gifts (that is, pecuniary gifts or fractional shares of a prere-

siduary fund) to charity or to certain descendants, under circumstances in which the

residue is to pass to or for descendants on a per stirpital basis. Others of the forms are

usable to minimize generation-skipping tax by integrating trusts that, absent the adjust-

ments for the generation-skipping tax, have identical provisions.

I. PERCENTAGE OR F RACTIONAL -SHAR E DISPOSITIONS

A. Form 18.1: Percentage Disposition

(D) Percentage Disposition. Notwithstanding subsection (B) of this Section,

(1) Upon the death of the survivor of my wife and me, the Trustee shall

distribute ten percent of the trust estate of the Family Trust that passes to

the Trustee of the Family Trust upon the death of the survivor of my wife

and me and that remains after satisfaction of all dispositions and payments

under prior provisions of this instrument (including without limitation all

taxes, including any interest and penalty, that, after taking into account any

apportionment and reimbursement, are payable from the trust estate because

of my death and all taxes, including any interest and penalty, that, after tak-

ing into account any apportionment and reimbursement, are payable from

the trust estate because of the death of my wife) to [#A].

(2) The Trustee shall satisfy the percentage disposition, to the extent pos-

sible, from

a [property (or proceeds of property) that is included in the gross estate of the

survivor of my wife and me for purposes of determining the United States

18

Integration of Exempt and

Nonexempt Dispositions