HB-6197, As Passed House, June 1, 2010
May 20, 2010, Introduced by Rep. Kandrevas and referred to the Committee on Judiciary.
A bill to amend 1998 PA 386, entitled
"Estates and protected individuals code,"
by amending section 1213 (MCL 700.1213), as amended by 2000 PA 54,
and by adding section 2723.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1213. If an individual includes a provision in a will,
trust document, or beneficiary designation that is designed to
reduce federal estate tax liability to zero or the lowest possible
amount payable by describing a portion or amount measured by
reference to the unified credit, the exemption equivalent, other
credits, or other deductions, then unless specifically stated
otherwise, the reference to the credits, exemption, or deductions
shall be considered to include a reference to the family-owned
business deduction available under section 2057 of the internal
revenue
code of 1986, 26 U.S.C. USC
2057, if that deduction is
elected. Unless specifically stated otherwise, and subject to
section 2723, the reference to the unified credit or exemption
equivalent, or to the family-owned business deduction, shall be
considered to refer to the credit, exemption, or deduction as it
exists at the time of death of the individual.
Sec. 2723. (1) Except as provided in subsections (3) and (4),
a will, trust, or beneficiary designation of or by a decedent who
dies after December 31, 2009 and before January 1, 2011 shall be
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 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 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 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.
(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, or that manifests an
intent that a contrary rule shall apply if the decedent dies on a
date on which there is no then-applicable federal estate or
generation-skipping transfer tax.
(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.
(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.