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decisions of the Court of Appeals for the Fifth Circuit issued
prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d
1206, 1209 (11th Cir. 1981).
In Florida Bank v. United States, supra, the decedent's will
directed the trustee to pay the widow $175 per month, pay an
annual $500 scholarship, and divide the balance of remaining
income, by reason of capital gains or otherwise, into three equal
portions for his children for as long as they should live, with
the remainder going to charity. The Court held that the estate
was not entitled to a section 2055 deduction because there was no
way to determine whether the charitable beneficiaries would
receive their bequest, nor what amount it would be if they were
to receive it. The amount of the charitable remainder was not
ascertainable because the trustee had the discretion to buy and
sell securities and distribute the capital gains to the
decedent's children. The trustee could purchase securities, sell
them at a profit, and then distribute the capital gains to the
life beneficiaries. If the securities in which the trustee
reinvested the principal declined in value, the corpus could be
largely invaded.
The Court indicated that the trustee's discretion to invade
the corpus by that means was not subject to a readily
ascertainable standard that would preserve the deductibility of
the charitable bequest. Id. at 468-471; see also Merchants Natl.
Bank v. Commissioner, 320 U.S. 256 (1943). The Court
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