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United States, 259 F. Supp. 184 (S.D.N.Y. 1966) (surviving spouse
not entitled to income for life when spouse's right to income is
terminated upon remarriage); see also Starrett v. Commissioner,
223 F.2d at 166. A power of appointment that lapses on the
happening of a contingent event such as incompetency is outside
the reach of section 2056(b)(5). This is especially true in the
instant case where applicable State law requires that an exercise
or release of a power of appointment must adhere to the same
formalities as those that must be followed to create a power of
appointment or to transfer property in general, e.g., by a
written instrument. Minn. Stat. Ann. sec. 502.64, 502.79 Subd. 2
(West 1990).
We also disagree with the estate's alternative argument.
The estate has set forth no good reason why we should disregard
the validity of the Trust, and we decline to do so. Although the
estate states correctly that we must (and do) interpret the
language of the Agreement in accordance with the settlors'
intent, see, e.g., In re Trust Created Under Agreement with
McLaughlin, 361 N.W.2d 43, 44 (Minn. 1985), the mere fact that
the settlors meant for Trust A to qualify for the marital
deduction does not mean that it does so qualify, United States v.
First Natl. Trust & Sav. Bank, 335 F.2d at 113-114. In order for
the estate to avail itself of the marital deduction, the Trust
must fall within the statutory and regulatory requirements for
that deduction. Id. As discussed above, it does not.
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