Form Sch M Sch M Bequests, etc., to Surviving Spouse

Form 706 (Rev. 9-2009)

Decedent’s Social Security Number

Estate of:

SCHEDULE M—Bequests, etc., to Surviving Spouse
Election To Deduct Qualified Terminable Interest Property Under Section 2056(b)(7). If a trust (or other property) meets the
requirements of qualified terminable interest property under section 2056(b)(7), and
a. The trust or other property is listed on Schedule M and
b. The value of the trust (or other property) is entered in whole or in part as a deduction on Schedule M,
then unless the executor specifically identifies the trust (all or a fractional portion or percentage) or other property to be
excluded from the election, the executor shall be deemed to have made an election to have such trust (or other property)
treated as qualified terminable interest property under section 2056(b)(7).
If less than the entire value of the trust (or other property) that the executor has included in the gross estate is entered as a
deduction on Schedule M, the executor shall be considered to have made an election only as to a fraction of the trust (or other
property). The numerator of this fraction is equal to the amount of the trust (or other property) deducted on Schedule M. The
denominator is equal to the total value of the trust (or other property).
Election To Deduct Qualified Domestic Trust Property Under Section 2056A. If a trust meets the requirements of a qualified
domestic trust under section 2056A(a) and this return is filed no later than 1 year after the time prescribed by law (including
extensions) for filing the return, and
a. The entire value of a trust or trust property is listed on Schedule M and
b. The entire value of the trust or trust property is entered as a deduction on Schedule M, then unless the executor specifically
identifies the trust to be excluded from the election, the executor shall be deemed to have made an election to have the entire
trust treated as qualified domestic trust property.
Yes

1
2a
b
c
d
e
3

Did any property pass to the surviving spouse as a result of a qualified disclaimer?
If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b).
In what country was the surviving spouse born?
What is the surviving spouse’s date of birth?
Is the surviving spouse a U.S. citizen?
If the surviving spouse is a naturalized citizen, when did the surviving spouse acquire citizenship?
If the surviving spouse is not a U.S. citizen, of what country is the surviving spouse a citizen?
Election Out of QTIP Treatment of Annuities. Do you elect under section 2056(b)(7)(C)(ii) not to treat as qualified
terminable interest property any joint and survivor annuities that are included in the gross estate and would otherwise
be treated as qualified terminable interest property under section 2056(b)(7)(C)? (see instructions)
Description of property interests passing to surviving spouse.
For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN

Item
number

No

1

2c

3
Amount

QTIP property:
A1

All other property:
B1

Total from continuation schedules (or additional sheets) attached to this schedule
4
5a
b
c

Total amount of property interests listed on Schedule M
5a
Federal estate taxes payable out of property interests listed on Schedule M
5b
Other death taxes payable out of property interests listed on Schedule M
Federal and state GST taxes payable out of property interests listed
5c
on Schedule M
d Add items 5a, 5b, and 5c
6 Net amount of property interests listed on Schedule M (subtract 5d from 4). Also enter on
Part 5—Recapitulation, page 3, at item 20

4

5d

6
(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.)
(See the instructions on the reverse side.)

Schedule M—Page 27

Form 706 (Rev. 9-2009)

Instructions for Schedule M—Bequests,
etc., to Surviving Spouse (Marital
Deduction)
General
You must complete Schedule M and file it with the return if
you claim a deduction on Part 5—Recapitulation, item 20.
The marital deduction is authorized by section 2056 for
certain property interests that pass from the decedent to the
surviving spouse. You may claim the deduction only for
property interests that are included in the decedent’s gross
estate (Schedules A through I ).
Note. The marital deduction is generally not allowed if the
surviving spouse is not a U.S. citizen. The marital deduction
is allowed for property passing to such a surviving spouse in
a qualified domestic trust (QDOT) or if such property is
transferred or irrevocably assigned to such a trust before the
estate tax return is filed. The executor must elect QDOT
status on this return. See the instructions that follow, on
pages 29 and 30, for details on the election.

Property Interests That You May List on
Schedule M
Generally, you may list on Schedule M all property interests
that pass from the decedent to the surviving spouse and are
included in the gross estate. However, you should not list
any nondeductible terminable interests (described below) on
Schedule M unless you are making a QTIP election. The
property for which you make this election must be included
on Schedule M. See Qualified terminable interest property on
the following page.
For the rules on common disaster and survival for a limited
period, see section 2056(b)(3).
You may list on Schedule M only those interests that the
surviving spouse takes:
1. As the decedent’s legatee, devisee, heir, or donee;
2. As the decedent’s surviving tenant by the entirety or
joint tenant;
3. As an appointee under the decedent’s exercise of a
power or as a taker in default at the decedent’s nonexercise
of a power;
4. As a beneficiary of insurance on the decedent’s life;
5. As the surviving spouse taking under dower or curtesy
(or similar statutory interest); and
6. As a transferee of a transfer made by the decedent at
any time.

Property Interests That You May Not List on
Schedule M
You should not list on Schedule M:
1. The value of any property that does not pass from the
decedent to the surviving spouse;
2. Property interests that are not included in the
decedent’s gross estate;

3. The full value of a property interest for which a
deduction was claimed on Schedules J through L. The value
of the property interest should be reduced by the deductions
claimed with respect to it;
4. The full value of a property interest that passes to the
surviving spouse subject to a mortgage or other
encumbrance or an obligation of the surviving spouse.
Include on Schedule M only the net value of the interest after
reducing it by the amount of the mortgage or other debt;
5. Nondeductible terminable interests (described below); or
6. Any property interest disclaimed by the surviving
spouse.

Terminable Interests
Certain interests in property passing from a decedent to a
surviving spouse are referred to as terminable interests.
These are interests that will terminate or fail after the
passage of time, or on the occurrence or nonoccurrence of
some contingency. Examples are: life estates, annuities,
estates for terms of years, and patents.
The ownership of a bond, note, or other contractual
obligation, which when discharged would not have the effect
of an annuity for life or for a term, is not considered a
terminable interest.
Nondeductible terminable interests. A terminable interest is
nondeductible. Unless you are making a QTIP election, a
terminable interest should not be entered on Schedule M if:
1. Another interest in the same property passed from the
decedent to some other person for less than adequate and
full consideration in money or money’s worth; and
2. By reason of its passing, the other person or that
person’s heirs may enjoy part of the property after the
termination of the surviving spouse’s interest.
This rule applies even though the interest that passes from
the decedent to a person other than the surviving spouse is
not included in the gross estate, and regardless of when the
interest passes. The rule also applies regardless of whether
the surviving spouse’s interest and the other person’s
interest pass from the decedent at the same time.
Property interests that are considered to pass to a person
other than the surviving spouse are any property interest
that: (a) passes under a decedent’s will or intestacy; (b) was
transferred by a decedent during life; or (c) is held by or
passed on to any person as a decedent’s joint tenant, as
appointee under a decedent’s exercise of a power, as taker
in default at a decedent’s release or nonexercise of a power,
or as a beneficiary of insurance on the decedent’s life.
For example, a decedent devised real property to his wife
for life, with remainder to his children. The life interest that
passed to the wife does not qualify for the marital deduction
because it will terminate at her death and the children will
thereafter possess or enjoy the property.
However, if the decedent purchased a joint and survivor
annuity for himself and his wife who survived him, the value
of the survivor’s annuity, to the extent that it is included in
the gross estate, qualifies for the marital deduction because

Examples of Listing of Property Interests on Schedule M
Item
number

B1

Description of property interests passing to surviving spouse.
For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN.

All other property:
One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenants
with right of survivorship under deed dated July 15, 1975 (Schedule E, Part I, item 1)

B2

Proceeds of Metropolitan Life Insurance Company policy No. 104729, payable in one sum to surviving spouse
(Schedule D, item 3)

B3

Cash bequest under Paragraph Six of will

Schedule M—Page 28

Amount

$182,500
200,000
100,000

Form 706 (Rev. 9-2009)

even though the interest will terminate on the wife’s death,
no one else will possess or enjoy any part of the property.
The marital deduction is not allowed for an interest that the
decedent directed the executor or a trustee to convert, after
death, into a terminable interest for the surviving spouse. The
marital deduction is not allowed for such an interest even if
there was no interest in the property passing to another
person and even if the terminable interest would otherwise
have been deductible under the exceptions described below
for life estate and life insurance and annuity payments with
powers of appointment. For more information, see
Regulations sections 20.2056(b)-1(f) and 20.2056(b)-1(g),
Example (7).
If any property interest passing from the decedent to the
surviving spouse may be paid or otherwise satisfied out of
any of a group of assets, the value of the property interest is,
for the entry on Schedule M, reduced by the value of any
asset or assets that, if passing from the decedent to the
surviving spouse, would be nondeductible terminable
interests. Examples of property interests that may be paid or
otherwise satisfied out of any of a group of assets are a
bequest of the residue of the decedent’s estate, or of a share
of the residue, and a cash legacy payable out of the general
estate.
Example. A decedent bequeathed $100,000 to the
surviving spouse. The general estate includes a term for
years (valued at $10,000 in determining the value of the
gross estate) in an office building, which interest was
retained by the decedent under a deed of the building by gift
to a son. Accordingly, the value of the specific bequest
entered on Schedule M is $90,000.
Life estate with power of appointment in the surviving
spouse. A property interest, whether or not in trust, will be
treated as passing to the surviving spouse, and will not be
treated as a nondeductible terminable interest if: (a) the
surviving spouse is entitled for life to all of the income from
the entire interest; (b) the income is payable annually or at
more frequent intervals; (c) the surviving spouse has the
power, exercisable in favor of the surviving spouse or the
estate of the surviving spouse, to appoint the entire interest;
(d) the power is exercisable by the surviving spouse alone
and (whether exercisable by will or during life) is exercisable
by the surviving spouse in all events; and (e) no part of the
entire interest is subject to a power in any other person to
appoint any part to any person other than the surviving
spouse (or the surviving spouse’s legal representative or
relative if the surviving spouse is disabled. See Rev. Rul.
85-35, 1985-1 C.B. 328). If these five conditions are satisfied
only for a specific portion of the entire interest, see the
section 2056(b) regulations to determine the amount of the
marital deduction.
Life insurance, endowment, or annuity payments, with
power of appointment in surviving spouse. A property
interest consisting of the entire proceeds under a life
insurance, endowment, or annuity contract is treated as
passing from the decedent to the surviving spouse, and will
not be treated as a nondeductible terminable interest if: (a)
the surviving spouse is entitled to receive the proceeds in
installments, or is entitled to interest on them, with all
amounts payable during the life of the spouse, payable only
to the surviving spouse; (b) the installment or interest
payments are payable annually, or more frequently, beginning
not later than 13 months after the decedent’s death; (c) the
surviving spouse has the power, exercisable in favor of the
surviving spouse or of the estate of the surviving spouse, to
appoint all amounts payable under the contract; (d) the
power is exercisable by the surviving spouse alone and
(whether exercisable by will or during life) is exercisable by
the surviving spouse in all events; and (e) no part of the
amount payable under the contract is subject to a power in

any other person to appoint any part to any person other
than the surviving spouse. If these five conditions are
satisfied only for a specific portion of the proceeds, see the
section 2056(b) regulations to determine the amount of the
marital deduction.
Charitable remainder trusts. An interest in a charitable
remainder trust will not be treated as a nondeductible
terminable interest if:
1. The interest in the trust passes from the decedent to the
surviving spouse, and
2. The surviving spouse is the only beneficiary of the trust
other than charitable organizations described in section
170(c).
A charitable remainder trust is either a charitable remainder
annuity trust or a charitable remainder unitrust. (See section
664 for descriptions of these trusts.)

Election To Deduct Qualified Terminable Interests
(QTIP)
You may elect to claim a marital deduction for qualified
terminable interest property or property interests. You make
the QTIP election simply by listing the qualified terminable
interest property on Schedule M and deducting its value. You
are presumed to have made the QTIP election if you list the
property and deduct its value on Schedule M. If you make
this election, the surviving spouse’s gross estate will include
the value of the qualified terminable interest property. See
the instructions for Part 4—General Information, line 6, for
more details. The election is irrevocable.
If you file a Form 706 in which you do not make this
election, you may not file an amended return to make the
election unless you file the amended return on or before the
due date for filing the original Form 706.
The effect of the election is that the property (interest) will
be treated as passing to the surviving spouse and will not be
treated as a nondeductible terminable interest. All of the
other marital deduction requirements must still be satisfied
before you may make this election. For example, you may
not make this election for property or property interests that
are not included in the decedent’s gross estate.
Qualified terminable interest property. Qualified terminable
interest property is property (a) that passes from the
decedent, and (b) in which the surviving spouse has a
qualifying income interest for life.
The surviving spouse has a qualifying income interest for
life if the surviving spouse is entitled to all of the income
from the property payable annually or at more frequent
intervals, or has a usufruct interest for life in the property,
and during the surviving spouse’s lifetime no person has a
power to appoint any part of the property to any person
other than the surviving spouse. An annuity is treated as an
income interest regardless of whether the property from
which the annuity is payable can be separately identified.
Amendments to Regulations sections 20.2044-1,
20.2056(b)-7, and 20.2056(b)-10 clarify that an interest in
property is eligible for QTIP treatment if the income interest
is contingent upon the executor’s election even if that portion
of the property for which no election is made will pass to or
for the benefit of beneficiaries other than the surviving
spouse.
The QTIP election may be made for all or any part of
qualified terminable interest property. A partial election must
relate to a fractional or percentile share of the property so
that the elective part will reflect its proportionate share of the
increase or decline in the whole of the property when
applying section 2044 or 2519. Thus, if the interest of the
surviving spouse in a trust (or other property in which the
spouse has a qualified life estate) is qualified terminable

Schedule M—Page 29

Form 706 (Rev. 9-2009)

interest property, you may make an election for a part of the
trust (or other property) only if the election relates to a
defined fraction or percentage of the entire trust (or other
property). The fraction or percentage may be defined by
means of a formula.

Qualified Domestic Trust Election (QDOT)
The marital deduction is allowed for transfers to a surviving
spouse who is not a U.S. citizen only if the property passes
to the surviving spouse in a qualified domestic trust (QDOT)
or if such property is transferred or irrevocably assigned to a
QDOT before the decedent’s estate tax return is filed.
A QDOT is any trust:
1. That requires at least one trustee to be either an
individual who is a citizen of the United States or a domestic
corporation;
2. That requires that no distribution of corpus from the
trust can be made unless such a trustee has the right to
withhold from the distribution the tax imposed on the QDOT;
3. That meets the requirements of any applicable
regulations; and
4. For which the executor has made an election on the
estate tax return of the decedent.
Note. For trusts created by an instrument executed before
November 5, 1990, paragraphs 1 and 2 above will be treated
as met if the trust instrument requires that all trustees be
individuals who are citizens of the United States or domestic
corporations.
You make the QDOT election simply by listing the qualified
domestic trust or the entire value of the trust property on
Schedule M and deducting its value. You are presumed to
have made the QDOT election if you list the trust or trust
property and deduct its value on Schedule M. Once made,
the election is irrevocable.
If an election is made to deduct qualified domestic trust
property under section 2056A(d), provide the following
information for each qualified domestic trust on an
attachment to this schedule:
1. The name and address of every trustee;
2. A description of each transfer passing from the
decedent that is the source of the property to be placed in
trust; and
3. The employer identification number (EIN) for the trust.
The election must be made for an entire QDOT trust. In
listing a trust for which you are making a QDOT election,
unless you specifically identify the trust as not subject to the
election, the election will be considered made for the entire
trust.
The determination of whether a trust qualifies as a QDOT
will be made as of the date the decedent’s Form 706 is filed.
If, however, judicial proceedings are brought before the Form
706’s due date (including extensions) to have the trust
revised to meet the QDOT requirements, then the
determination will not be made until the court-ordered
changes to the trust are made.

Line 1
If property passes to the surviving spouse as the result of a
qualified disclaimer, check “Yes” and attach a copy of the
written disclaimer required by section 2518(b).

Line 3
Section 2056(b)(7) creates an automatic QTIP election for
certain joint and survivor annuities that are includible in the
estate under section 2039. To qualify, only the surviving
spouse can have the right to receive payments before the
death of the surviving spouse.

Schedule M—Page 30

The executor can elect out of QTIP treatment, however, by
checking the “Yes” box on line 3. Once made, the election
is irrevocable. If there is more than one such joint and
survivor annuity, you are not required to make the election
for all of them.
If you make the election out of QTIP treatment by checking
“Yes” on line 3, you cannot deduct the amount of the annuity
on Schedule M. If you do not make the election out, you
must list the joint and survivor annuities on Schedule M.

Listing Property Interests on Schedule M
List each property interest included in the gross estate that
passes from the decedent to the surviving spouse and for
which a marital deduction is claimed. This includes otherwise
nondeductible terminable interest property for which you are
making a QTIP election. Number each item in sequence and
describe each item in detail. Describe the instrument
(including any clause or paragraph number) or provision of
law under which each item passed to the surviving spouse. If
possible, show where each item appears (number and
schedule) on Schedules A through I.
In listing otherwise nondeductible property for which you
are making a QTIP election, unless you specifically identify a
fractional portion of the trust or other property as not subject
to the election, the election will be considered made for all of
the trust or other property.
Enter the value of each interest before taking into account
the federal estate tax or any other death tax. The valuation
dates used in determining the value of the gross estate apply
also on Schedule M.
If Schedule M includes a bequest of the residue or a part
of the residue of the decedent’s estate, attach a copy of the
computation showing how the value of the residue was
determined. Include a statement showing:
● The value of all property that is included in the decedent’s
gross estate (Schedules A through I) but is not a part of the
decedent’s probate estate, such as lifetime transfers, jointly
owned property that passed to the survivor on decedent’s
death, and the insurance payable to specific beneficiaries;
● The values of all specific and general legacies or devises,
with reference to the applicable clause or paragraph of the
decedent’s will or codicil. (If legacies are made to each
member of a class, for example, $1,000 to each of
decedent’s employees, only the number in each class and
the total value of property received by them need be
furnished);
● The date of birth of all persons, the length of whose lives
may affect the value of the residuary interest passing to the
surviving spouse; and
● Any other important information such as that relating to
any claim to any part of the estate not arising under the will.
Lines 5a, 5b, and 5c. The total of the values listed on
Schedule M must be reduced by the amount of the federal
estate tax, the federal GST tax, and the amount of state or
other death and GST taxes paid out of the property interest
involved. If you enter an amount for state or other death or
GST taxes on line 5b or 5c, identify the taxes and attach
your computation of them.
Attachments. If you list property interests passing by the
decedent’s will on Schedule M, attach a certified copy of the
order admitting the will to probate. If, when you file the
return, the court of probate jurisdiction has entered any
decree interpreting the will or any of its provisions affecting
any of the interests listed on Schedule M, or has entered any
order of distribution, attach a copy of the decree or order. In
addition, the IRS may request other evidence to support the
marital deduction claimed.