Upon my passing, assume that my spouse disclaims $2.0MM of after-tax assets (sitting in my RLT), creates and places them into a ‘Family Trust’ (marital disclaimer trust). She inherits the balance of my trust assets with no estate tax consequence (both fed and Illinois) due to the unlimited marital deduction. Then she disclaims a $2.0MM portion of my traditional IRA’s. This piece goes directly to the contingent beneficiaries and starts their 10 year draw-down period. The spouse again inherits the balance of my IRA’s with no estate tax consequence due to the unlimited marital deduction (both fed and Illinois).
I am unclear how that piece of disclaimed IRA is considered: here is my 2-part bottom line questions:
a) is that combined $4.0MM that is not inherited by my spouse now considered below the Illinois exemption level, thereby resulting in zero Illinois estate tax?
b) is my spouse able to assume my level of DSUE of $10.92MM OR $8.92MM?