-29-
revg. on this issue T.C. Memo. 1966-144, and Estate of Cristofani
v. Commissioner, 97 T.C. 74 (1991).
In Crummey v. Commissioner, supra, the settlors created an
irrevocable living trust for the benefit of their four children,
some of whom were minors. The trust provided that the trustee
could receive any real or personal property from the trustors or
anyone else or any other source. With respect to such additions
to the corpus, each child was given an absolute power to withdraw
up to $4,000 in cash by making a written demand upon the trustee
prior to the end of the calendar year of the addition.
Relying on this power, the settlors claimed the section
2503(b) exclusion on transfers of property to the trust for each
trust beneficiary. Respondent allowed the exclusion with respect
to the gifts in trust for the beneficiaries who were adults, but
disallowed the exclusion for the minor beneficiaries. The ground
for the disallowance was that the minors' powers were not gifts
of present interests.
In deciding whether the minor beneficiaries received a
present interest, the Court of Appeals for the Ninth Circuit
specifically rejected any test based upon the likelihood that the
minor beneficiaries would actually receive present enjoyment of
the property. In fact, the court stated that "it is likely that
some, if not all, of the beneficiaries did not even know that
they had any right to demand funds from the trust." Id. at 88.
Instead, the court concluded that all exclusions should be
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