Marital deduction trusts.

Existing law regulates the interpretation and administration of wills, trusts, and estates. Existing law regulates the compliance of marital deduction gifts with the federal Internal Revenue Code. Existing law provides that if a marital deduction gift is made in trust, certain additional conditions apply to the marital deduction trust, including, among others, that 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. Existing law requires that in the case of qualified terminable interest property specified in certain provisions of the Internal Revenue Code, on termination of the interest of the transferor's spouse in the trust, all of the remaining accrued or undistributed income pass to the transferor's spouse, except as provided. This bill would delete the provision relating to qualified terminable interest property described above and instead require that the term income, for purposes of the marital deduction property, be construed in a manner consistent with specified provisions of the Internal Revenue Code, and include a unitrust payment or other allocation of income determined pursuant to a reasonable apportionment of total investment return, as specified.