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Use of Formula Clauses To Value Gifts

Creative strategies to avoid challenges.

Formula clauses have been used in estate planning almost as long as there’s been an estate tax. Practitioners have historically used formulas to determine how to allocate between the marital and non-marital share of an estate.  These allocations served to maximize the estate tax exemption amount and allow for the efficient use of the marital deduction. The instructions to the United States Gift (and Generation Skipping Transfer Tax) Return Form 709 specifically reference formulas as an


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