Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A. - Page 52

                                        - 52 -                                          
          Commissioner, 100 T.C. at 58; sec. 20.2056(d)-2(b), Estate Tax                
          Regs., we decline to adopt a rule whereby a spouse attempting to              
          do so is forced to renounce rights allowed by the very terms of               
          the deduction statute.                                                        
               Here, of the two elements required to establish a qualifying             
          income interest for life and consequent eligibility for the QTIP              
          deduction, we decided above that the first had been met.  We then             
          concluded that all interests affecting the second, with the                   
          possible exception of Mrs. Lassiter’s inter vivos power to                    
          appoint to descendants’ future spouses, had been properly                     
          disclaimed.  Because this power is personal to Mr. Lassiter’s                 
          wife, and because we again have no reason to question its                     
          effectiveness under Georgia law, we observe that a qualified                  
          disclaimer thereof would parallel the situation approved for QTIP             
          purposes in section 20.2056(b)-7(h), Example (4), Estate Tax                  
          Regs.  Thus, the effect of our accepting Mrs. Lassiter’s                      
          disclaimer of her inter vivos power would be to render the Item V             
          trust a deductible interest under section 2056(b)(7).  Such                   
          deduction, in turn, would cause the property to be subject to                 
          Federal estate tax in Mrs. Lassiter’s estate.  We therefore hold              
          that Mrs. Lassiter made a qualified disclaimer of her inter vivos             
          power over the Item V trust.  Her ability to appoint trust                    
          property during her life has been extinguished.  As a result,                 
          there remain no powers over the Item V trust of the type                      

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