Valuation Discounts After Mellinger, Nowell and Lopes
Probate and Property, March/April 2000, Volume 14, Number 2
By Farhad Aghdami
Farhad Aghdami is a member of Williams, Mullen, Clark & Dobbins in Richmond, Virginia.
Three recent Tax Court cases, Estate of Mellinger v. Commissioner, 112 T.C. 4 (1999), action on decision, 1999-006 (Aug. 30, 1999), Estate of Nowell v. Commissioner, T.C. Memo 1999-15, and Estate of Lopes v. Commissioner, T.C. Memo 1999-225, held that it is not necessary, for valuation purposes, to aggregate assets held in a qualified terminable interest property (QTIP) trust with other fractional or minority interests in the same property owned outright by the surviving spouse. In Action on Decision 1999-006, the Commissioner of the IRS acquiesced in the result in the Mellinger case. These cases and the Commissioner's acquiescence should cause most estate planners to reconsider both the use of QTIP trusts over other dispositions that qualify for the estate tax marital deduction and the manner in which assets are titled by husband and wife before death.