[EstGift] Elective Share Valuation

[Day, Eileen]

Has anyone looked at the question of how to value a spouse's elective share in a taxable estate as between state law value and estate tax value?

Assume there is a binding buy-sell agreement for stock to be sold at something other than fair market value (under a pre-2702 agreement). If the IRS disputes the buy-sell value and prevails so that there is a part sale/part gift of the stock to the other parties to the agreement, is the spouse's elective share calculated on the fair market value or the buy-sell price?  A number of state law cases indicate that courts have adopted estate tax valuation principals to value assets for elective share purposes (specifically valuing annuities, etc. using IRS tables/valuation principals).  Any experience to the contrary?

Thank you,
Eileen

Eileen M. Day
Partner

STINSON LLP
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