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
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011