Who must sign a special-use valuation agreement?

Key takeaway

Every person with a present or future interest in the specially valued property at the decedent's death must sign the section 2032A agreement. The rule includes vested and contingent interests, remainder holders, and holders of powers of appointment. For an estate electing special-use valuation, each qualified heir also consents to personal liability if the property is disposed of early or its qualified use ceases early.

Interests that require a signature

A present or future interest requires a signature, whether vested or contingent. Remainder holders and holders of powers of appointment are included. The agreement reaches each person with an interest in the specially valued property at the decedent's death.

Each qualified heir must expressly consent to personal liability for additional estate tax if the property is disposed of early or its qualified use ceases early. The consent concerns the property subject to the section 2032A election and the specified events that can create recapture tax liability.

People who do not count solely for another reason

An heir's ability to contest a will, by itself, does not count as an interest in the property for this agreement. Estate creditors are not treated as interest holders solely because they are creditors. The distinction turns on whether the person has an interest in the specially valued property at the decedent's death.

Listing and filing the agreement

The IRS instructions call for each person receiving an interest in the specially valued property to be listed on Schedule T of Form 706. A valid election requires a notice of election and a fully executed agreement filed with the estate tax return. Without a properly executed agreement, the election is not valid.