2023 Tennessee Code › Title 32 - WILLS (§§ 32-1-101 — 32-11-113) › Chapter 3 - CONSTRUCTION, OPERATION AND EFFECT (§§ 32-3-101 — 32-3-115) › Section 32-3-108 - Marital deduction

(a)
(1)
IF,
(A)
A decedent dies after December 31, 1981;
(B)
Leaving a will executed, or a trust created, before September 12, 1981, that contains a formula expressly providing that the spouse is to receive the maximum amount of property qualifying for the marital deduction allowable by federal law;
(C)
The formula referred to in subdivision (a)(1)(B) was not amended to refer specifically to an unlimited marital deduction under federal law at any time after September 12, 1981, and before the death of the decedent;
(D)
The will or trust also contains a bequest to, or in trust for the benefit of, the decedent's spouse that qualifies as qualified terminable interest property pursuant to § 2056(b)(7) of the Internal Revenue Code (
26 U.S.C. § 2056(b)(7)
);
(2)
THEN, the formula referred to in subdivision (a)(1)(B) shall be construed to refer to the unlimited marital deduction allowable by federal law as amended by subsection (a) of § 403 of the Economic Recovery Tax Act of 1981; provided, that the formula shall not be effective as to, or be deemed to, convey and transfer to the decedent's spouse, a sum in excess of the greater of:
(A)
Two hundred fifty thousand dollars ($250,000); or
(B)
Fifty percent (50%) of the value of the adjusted gross estate of the decedent as defined in § 2056(c)(2) of the Internal Revenue Code (
26 U.S.C. § 2056(c)(2)
) prior to its amendment by the Economic Recovery Tax Act of 1981;
so that such qualified terminable interest property, as well as the property passing to the spouse pursuant to the formula clause, will qualify for the unlimited marital deduction under § 2056 of the Internal Revenue Code (
26 U.S.C. § 2056(b)(7)
), but the amount of property passing to the spouse under the formula clause shall not be increased or decreased from what would have passed thereunder prior to the enactment of the Economic Recovery Tax Act of 1981;
(3)
Notwithstanding subdivision (a)(1)(D), the formula referred to in subdivision (a)(1)(B) will be effective as to or deemed to convey and transfer to the decedent's spouse an unlimited sum, if the court having jurisdiction over decedent's probate estate determines in a proceeding in which all beneficiaries of the estate are represented, that based on all the facts and circumstances the decedent intended or would have intended that the formula should be applied so as to take advantage of the unlimited marital deduction allowed by federal law as amended by subsection (a) of § 403 of the Economic Recovery Tax Act of 1981. This subdivision (a)(3) shall apply only for decedents whose deaths occur after September 12, 1981, and prior to October 1, 1983, and, therefore, shall in no way affect the computation of the amount deductible for Tennessee inheritance tax purposes pursuant to §
67-8-315(a)(6)
.
(b)
For a decedent dying before January 1, 2016, this section shall in no way affect the computation of the amount deductible for Tennessee inheritance tax purposes pursuant to §
67-8-315(a)(6)
prior to October 1, 1983.
Amended by 2017 Tenn. Acts, ch. 290, s 10, eff. 5/4/2017.
Acts 1983, ch. 26, § 1; T.C.A., § 32-309; Acts 1987, ch. 322, § 22.