Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 48

                                        - 48 -                                          
          Since Ga. Code Ann. section 53-2-115 broadly permits                          
          beneficiaries to disclaim “any powers over or rights with respect             
          to such property”, we see no grounds for questioning the efficacy             
          under State law of the descendants’ disclaimers of rights to                  
          corpus.  Thus, for reasons analogous to those explained above in              
          connection with the children’s right to receive income, we                    
          conclude that the disclaimers likewise extinguished the trustee’s             
          authority to distribute principal.                                            
               As regards Mrs. Lassiter’s inter vivos power of appointment,             
          authority of this type is declared by regulation to be                        
          incompatible with the definition of a qualifying income interest              
          for life:  “For purposes of section 2056(b)(7)(B)(ii)(II), the                
          surviving spouse is included within the prohibited class of                   
          powerholders referred to therein.”  Sec. 20.2056(b)-7(d)(1),                  
          Estate Tax Regs.  Consequently, this power must be negated by the             
          1995 disclaimers in order for the Item V trust to be eligible for             
          QTIP treatment.                                                               
               With respect to the adult, minor, and unborn or                          
          unascertained descendants by or on whose behalf disclaimers were              
          executed, the previously quoted Example (4) of section                        
          20.2056(b)-7(h), Estate Tax Regs., supports the conclusion that               
          their renunciations were equally sufficient to extinguish their               
          right to receive under Mrs. Lassiter’s inter vivos power.  The                
          same would be true for Mr. Smith, Cathy’s spouse.  However, the               

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