Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 51

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          to a surviving spouse’s disclaimer.  Accordingly, while                       
          renunciation of an inter vivos power of appointment but retention             
          of a testamentary power would not, in general, result in a                    
          qualified disclaimer, see sec. 25.2518-3(d), Example (9), Gift                
          Tax Regs., a surviving spouse is not so constrained.  So long as              
          the spouse’s retained power cannot be exercised in a nontaxable               
          context, the disclaimer is effective for tax purposes.                        
               Section 2044, in turn, expressly provides that the value of              
          any property for which a deduction was taken under section                    
          2056(b)(7) is included in the surviving spouse’s gross estate.                
          Consequently, a surviving spouse cannot, by means of a                        
          testamentary power of appointment over a QTIP trust, direct                   
          beneficial enjoyment of the trust property in a transfer that                 
          will not be subject to Federal estate tax.  We therefore conclude             
          that retention of such a testamentary power does not cause the                
          disclaimer of an inter vivos power to fail to satisfy the section             
          2518 requirement when a QTIP deduction will be taken for the                  
          trust to which the powers relate.                                             
               Moreover, we note that the foregoing construction harmonizes             
          with section 2056, which explicitly permits a surviving spouse to             
          hold a testamentary power of appointment over a QTIP trust.                   
          Since regulations contemplate and case law affirms that                       
          disclaimers may be used to enable otherwise ineligible interests              
          to qualify for the marital deduction, see Estate of Bennett v.                

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