McKeon

Introduction

Plaintiffs-Appéllants, members of the MeKeon Family (“Estate”), appeal in this tax action the grant of summary judgment in favor of Defendant-Appellee United States of America (“Government”). The district court found that the Estate had overstated its marital deduction under I.R.C. § 2056.

We REVERSE.

Factual and Procedural Background

Marguerite B. MeKeon (“decedent”) died on April 27, 1994 while a resident of the State of California. She was survived by her husband Edward T. MeKeon, Jr. They had two sons, Ross. T. MeKeon and Scott M. MeKeon, both living at the time of the decedent’s death.

Prior to her death, the decedent executed two trusts and a will dated February 4, 1992.

I. The MeKeon Trust (“Trust A”)

Trust A was funded with the community property of the decedent and her husband, although the trust instrument permitted funding from separate property as well.

Trust A provided that upon the death of the first spouse, the trust was to be divided into 2 parts-a “Survivor’s Trust” and “Decedent’s Trust.”

*1203 A. The Survivor’s Trust ' (“Marital Share”)

The Survivor’s Trust consisted of the surviving spouse’s separate property, the surviving spouse’s…