PROBATE CODE
SECTION 21520-21526




21520.  As used in this chapter:
   (a) "Marital deduction" means the federal estate tax deduction
allowed for transfers under Section 2056 of the Internal Revenue Code
or the federal gift tax deduction allowed for transfers under
Section 2523 of the Internal Revenue Code.
   (b) "Marital deduction gift" means a transfer of property that is
intended to qualify for the marital deduction.



21521.  Sections 21524 and 21526 do not apply to a trust that
qualifies for the marital deduction under Section 20.2056(e)-2(b) of
the Code of Federal Regulations (commonly referred to as the "estate
trust").


21522.  If an instrument contains a marital deduction gift:
   (a) The provisions of the instrument, including any power, duty,
or discretionary authority given to a fiduciary, shall be construed
to comply with the marital deduction provisions of the Internal
Revenue Code.
   (b) The fiduciary shall not take any action or have any power that
impairs the deduction as applied to the marital deduction gift.
   (c) The marital deduction gift may be satisfied only with property
that qualifies for the marital deduction.



21523.  (a) The Economic Recovery Tax Act of 1981 was enacted August
13, 1981. This section applies to an instrument executed before
September 12, 1981 (before 30 days after enactment of the Economic
Recovery Tax Act of 1981).
   (b) If an instrument described in subdivision (a) indicates the
transferor's intention to make a gift that will provide the maximum
allowable marital deduction, the instrument passes to the recipient
an amount equal to the maximum amount of the marital deduction that
would have been allowed as of the date of the gift under federal law
as it existed before enactment of the Economic Recovery Tax Act of
1981, with adjustments for the following, if applicable:
   (1) The provisions of Section 2056(c)(1)(B) and (C) of the
Internal Revenue Code in effect immediately before enactment of the
Economic Recovery Tax Act of 1981.
   (2) To reduce the amount passing under the gift by the final
federal estate tax values of any other property that passes under or
outside of the instrument and qualifies for the marital deduction.
This subdivision does not apply to qualified terminable interest
property under Section 2056(b)(7) of the Internal Revenue Code.



21524.  If a marital deduction gift is made in trust, in addition to
the other provisions of this chapter, each of the following
provisions also applies to the marital deduction trust:
   (a) The transferor's spouse is the only beneficiary of income or
principal of the marital deduction property as long as the spouse is
alive. Nothing in this subdivision precludes exercise by the
transferor's spouse of a power of appointment included in a trust
that qualifies as a general power of appointment marital deduction
trust.
   (b) Subject to subdivision (d), the transferor's spouse is
entitled to all of the income of the marital deduction property not
less frequently than annually, as long as the spouse is alive.
   (c) The transferor's spouse has the right to require that the
trustee of the trust make unproductive marital deduction property
productive or to convert it into productive property within a
reasonable time.
   (d) Notwithstanding Section 16347, in the case of qualified
terminable interest property under Section 2056(b)(7) or Section 2523
(f) of the Internal Revenue Code, on termination of the interest of
the transferor's spouse in the trust all of the remaining accrued or
undistributed income shall pass to the estate of the transferor's
spouse, unless the instrument provides a different disposition that
qualifies for the marital deduction.



21525.  (a) If an instrument that makes a marital deduction gift
includes a condition that the transferor's spouse survive the
transferor by a period that exceeds or may exceed six months, other
than a condition described in subdivision (b), the condition shall be
limited to six months as applied to the marital deduction gift.
   (b) If an instrument that makes a marital deduction gift includes
a condition that the transferor's spouse survive a common disaster
that results in the death of the transferor, the condition shall be
limited to the time of the final audit of the federal estate tax
return for the transferor's estate, if any, as applied to the marital
deduction gift.
   (c) The amendment of subdivision (a) made by Chapter 113 of the
Statutes of 1988 is declaratory of, and not a change in, either
existing law or former Section 1036 (repealed by Chapter 923 of the
Statutes of 1987).



21526.  A fiduciary is not liable for a good faith decision to make
any election, or not to make any election, referred to in Section
2056(b)(7) or Section 2523(f) of the Internal Revenue Code.