Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 46

                                        - 46 -                                          
          not the other.  We conclude that Georgia law enables the Item V               
          trust to satisfy the requirement of section 2056(b)(7)(B)(ii)(I).             
               B.  No Power To Appoint                                                  
               We turn next to the requirement of section                               
          2056(b)(7)(B)(ii)(II) that no person have a power to appoint                  
          trust property to any person other than the surviving spouse.  In             
          addition to the specific references to income addressed in the                
          preceding discussion, several provisions of the Item V trust can              
          be construed generally as granting a power to appoint trust                   
          property.  Three such powers may be exercised and given effect                
          during Mrs. Lassiter’s life:  (1) The trustee may use principal               
          for the support in reasonable comfort of the surviving spouse;                
          (2) the trustee may use principal for the support and education               
          of Mr. Lassiter’s children; and (3) Mrs. Lassiter may direct the              
          trustee at any time to turn trust property over to Mr. Lassiter’s             
          descendants or their spouses.  The exercise of a fourth power,                
          Mrs. Lassiter’s testamentary power of appointment, would be given             
          effect at her death.                                                          
               With respect to the trustee’s power to distribute to Mrs.                
          Lassiter, regulations again provide specifically that such a                  
          power is not inconsistent with the marital deduction:                         
               An income interest in a trust will not fail to                           
               constitute a qualifying income interest for life solely                  
               because the trustee has a power to distribute principal                  
               to or for the benefit of the surviving spouse.  The                      
               fact that property distributed to a surviving spouse                     
               may be transferred by the spouse to another person does                  

Page:  Previous  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  Next

Last modified: May 25, 2011