§ 903 — Transfers to surviving spouse by decedent

The value of the property transferred to the surviving spouse by the decedent for purposes of § 901(a) of this title is an amount which equals the value of the property derived from the decedent by virtue of death. For purposes of this section:

(1) Property derived from the decedent by virtue of death shall be:

a. Property which is a part of the decedent’s estate which passes to the surviving spouse by testate or intestate succession;

b. Any property transferred to the surviving spouse by the decedent during the decedent’s lifetime and includable in the decedent’s gross estate under § 2036 of the Code [26 U.S.C. § 2036];

c. One half of any interest in property created at any time, including interests created before January 1, 1977, held by the decedent and the surviving spouse as:

1. Tenants by the entirety, or

2. Joint tenants with right of survivorship, but only if the decedent and the surviving spouse are the only joint tenants;

d. Any beneficial interest of the surviving spouse in a trust created by the decedent during the decedent’s lifetime or under the decedent’s will;

e. Any property appointed to the spouse by the decedent’s exercise of a general or special power of appointment;

f. Any lump sum immediately payable to the surviving spouse and the present value of amounts payable to the surviving spouse in the future, under any trust, contract or other arrangement, which are attributable to proceeds of insurance, including accidental death benefits, on the life of the decedent and includible in the decedent’s gross estate for federal estate tax purposes;

g. Any lump sum immediately payable to the surviving spouse and the present value of amounts payable to the surviving spouse in the future under annuity contracts under which the decedent was the primary annuitant; under any public or private plan or arrangement for the payment of pension or other retirement benefits, disability compensation, death benefits, salary continuation, or deferred compensation; and under any individual retirement account, but not including payments to the surviving spouse under the federal Social Security system or any other similar state or federal retirement system providing an individual right to a surviving spouse to receive payments as a result of the decedent’s death;

h. Any lump sum immediately payable to the surviving spouse and the present value of amounts payable to the surviving spouse in the future, under any trust, contract or other arrangement, which are attributable to property transferred by the decedent during the decedent’s lifetime; and

i. The value of the share of the surviving spouse resulting from rights in community property owned by the decedent in this or any other state.

(2) Property owned by the spouse at the decedent’s death is valued as of the date it is valued for purposes of computing the elective estate. Income earned by included property prior to the decedent’s death is not treated as property derived from the decedent.

(3) For purposes of this section, property or an interest in property considered derived from the decedent by virtue of death which has been disclaimed or renounced by the surviving spouse shall be deemed not to have been disclaimed or renounced for the purpose of computing the value of the property transferred to the surviving spouse under this chapter, subject to the following:

a. If the surviving spouse is the primary beneficiary of an interest in a trust that:

1. Does not qualify for the marital deduction for federal estate tax purposes, whether or not an election is made to qualify the trust for a marital deduction for federal estate tax purposes under the Code, and

2. Does not provide the surviving spouse with amounts payable in the future for which a present value can be determined as of the date of the decedent’s death,

any interest in the trust that the surviving spouse disclaims or renounces shall not be considered derived by the surviving spouse from the decedent under paragraph (1) of this section.

b. The surviving spouse shall be considered the primary beneficiary of a trust if:

1. The surviving spouse is designated as the primary beneficiary in the trust’s governing instrument;

2. There are no other beneficiaries of the trust entitled to distributions from the trust during the surviving spouse’s lifetime; or

3. There are other beneficiaries of the trust entitled to discretionary distributions from the trust during the surviving spouse’s lifetime, but the discretionary distributions can be made only after taking into consideration the interest of the surviving spouse, and if the discretionary distributions are based on an ascertainable standard.

Legislative History

59 Del. Laws, c. 384, § 1 ; 67 Del. Laws, c. 240, § 3 ; 70 Del. Laws, c. 186, § 1 ; 76 Del. Laws, c. 150, §§ 4-11