HOUSE BILL No. 5237

 

December 15, 2011, Introduced by Rep. Ouimet and referred to the Committee on Tax Policy.

 

     A bill to amend 1998 PA 386, entitled

 

"Estates and protected individuals code,"

 

by amending section 2723 (MCL 700.2723), as added by 2010 PA 224.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2723. (1) Except as provided in subsections subsection

 

(3), and (4), for purposes of interpreting a will, trust, or

 

beneficiary designation of or by a decedent who dies after December

 

31, 2009 and before January 1, 2011, shall be a will, trust, or

 

beneficiary designation is presumed to refer to the federal estate

 

tax and federal generation-skipping transfer tax laws as they apply

 

to estates of decedents who die on December 31, 2009 January 1,

 

2010, in accordance with section 302(c) of the 2010 federal tax

 

relief act without regard to the election permitted by section

 


301(c) of that act, if either of the following applies to the will,

 

trust, or beneficiary designation:

 

     (a) The will, trust, or beneficiary designation contains a

 

formula referring to the unified credit, estate tax exemption,

 

applicable exemption amount, applicable credit amount, applicable

 

exclusion amount, taxable estate, gross estate, estate tax value,

 

generation-skipping transfer tax exemption, GST exemption, marital

 

deduction, maximum marital deduction, unlimited marital deduction,

 

inclusion ratio, applicable fraction, or any section of the

 

internal revenue code of 1986, 26 USC 1 to 9834, relating to the

 

federal estate tax or generation-skipping transfer tax.

 

     (b) The will, trust, or beneficiary designation measures a

 

share of an estate, trust, or contractual benefit subject to a

 

beneficiary designation based on the amount that can pass free of

 

federal estate tax or the amount that can pass free of federal

 

generation-skipping transfer tax or based on a similar provision of

 

federal estate tax or federal generation-skipping transfer tax law.

 

     (2) A presumption that arises under subsection (1) is a

 

rebuttable presumption that the decedent intended that the

 

applicable formula be construed as provided in subsection (1). A

 

fiduciary of an estate, trust, or contractual benefit subject to a

 

beneficiary designation under which the presumption is applicable

 

shall give notice to each beneficiary whose interest is affected by

 

the presumption. A presumption that arises under subsection (1)

 

does not preclude a fiduciary from making any available election,

 

including an election under section 301(c) of the 2010 federal tax

 

relief act. A fiduciary who has made an election under section

 


301(c) of the 2010 federal tax relief act may commence a proceeding

 

to determine whether the decedent would not have intended the

 

formula to be construed as provided in subsection (1). All

 

interested persons affected by a presumption that arises under

 

subsection (1) may enter into a nonjudicial settlement under

 

section 7111 that the decedent intended the formula to be construed

 

in a different manner from the presumption under subsection (1). A

 

beneficiary whose interest is affected by the presumption or a

 

fiduciary of the will, trust, or contractual benefit subject to a

 

beneficiary designation may commence a proceeding to determine

 

whether the decedent intended that the formula be construed as

 

provided under subsection (1). Solely for the purpose of

 

determining the intent of the decedent regarding the formula under

 

this section, the court may consider the surrounding circumstances

 

and the rules of construction. A person who commences a proceeding

 

under this section has the burdens of proof and persuasion in

 

establishing the decedent's intent that the formula should not be

 

construed as provided in subsection (1). A proceeding under this

 

subsection shall be commenced or a nonjudicial settlement under

 

this subsection shall be executed within whichever of the following

 

is earlier:

 

     (a) Two years after the decedent's death.

 

     (b) Six months after the fiduciary sent the beneficiary a

 

notice of the presumption under this subsection or the due date for

 

filing the federal estate tax return of the decedent, if later.

 

     (3) A presumption under subsection (1) does not apply with

 

respect to a will, trust, or beneficiary designation that is

 


executed or amended after December 31, 2009 2010, or that manifests

 

an intent that a contrary rule shall apply if the decedent dies on

 

a date on which there is when no then-applicable federal estate or

 

generation-skipping transfer tax would apply.

 

     (4) If the federal estate tax or federal generation-skipping

 

transfer tax becomes applicable before January 1, 2011, the

 

reference in subsection (1) to January 1, 2011 shall refer instead

 

to the earlier date on which the tax takes effect.

 

     (4) (5) This section is a remedial response to changes in the

 

federal estate tax and generation-skipping transfer tax and takes

 

effect retroactively on January 1, 2010.

 

     (5) As used in this section, "2010 federal tax relief act"

 

means the tax relief, unemployment insurance reauthorization, and

 

job creation act of 2010, Public Law 111-312.