The IRS recently granted an extension of time to sever a marital trust into separate trusts, one exempt for generation-skipping transfer (GST) tax purposes, and one nonexempt for GST tax purposes.

In this case (PLR 200125040), the decedent's will separated some of his estate into a marital and a nonmarital trust. The estate's executrix made elections on the estate tax return to treat the marital trust as qualified terminable interest property (QTIP), but she failed to make a reverse QTIP election and also neglected to allocate any of the decedent's GST exemption.

To correct these problems, the executrix wants to sever the marital trust into two trusts, one exempt and one nonexempt for GST tax purposes. She requested an extension of time to do this and to make a reverse QTIP election for the GST tax exempt trust. The IRS granted the extension.