Estate of Dorothy Walsh, Deceased, Charles E. Walsh, Personal Respresentative - Page 1

                                   110 T.C. No. 29                                    

                               UNITED STATES TAX COURT                                

               ESTATE OF DOROTHY M. WALSH, DECEASED,                                  
               CHARLES E. WALSH, PERSONAL REPRESENTATIVE, Petitioner                  
               v. COMMISSIONER OF INTERNAL REVENUE, Respondent                        

               Docket No. 15150-97.               Filed June 15, 1998.                

                    H and W formed a trust to hold their property                     
               during their lives.  The trust agreement provided that                 
               the property would pass to two trusts (A and B) upon                   
               the death of the first spouse, and that the surviving                  
               spouse, while competent, was entitled during life to                   
               A's income and corpus.  The trust agreement provided                   
               that, upon the death or incompetency of the surviving                  
               spouse, A's property would be distributed to the                       
               persons chosen by the surviving spouse, and, if no such                
               persons were chosen, in six equal shares to the                        
               children of H and W.  W died before H, and W's estate                  
               claimed the marital deduction with respect to the                      
               assets passing to A.  B was funded with assets having                  
               an aggregate value of $600,000, and A was funded with                  
               the remaining assets.                                                  
                    Held:  The incompetency provisions in the trust                   
               agreement take the property passing to A outside the                   
               requirements for the marital deduction; the surviving                  
               spouse's power of appointment is not exercisable by the                
               surviving spouse alone and in all events, as is                        

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