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less than full and adequate consideration if, at the time of
decedent’s death, the enjoyment of the property was subject to
the decedent’s power to alter, amend, revoke, or terminate. See
sec. 2038(a)(1). Respondent asserts that decedent had the power
to revoke the gifts made by Ms. Thompson to decedent’s three
daughters and their husbands on December 30, 1993, and January
18, 1994 (the gifts), because the powers of attorney did not
authorize Ms. Thompson to make gifts of decedent’s real property;
therefore, the gifts must be included in decedent’s gross estate.
Petitioner contends that the powers of attorney authorized Ms.
Thompson to make the gifts and that, therefore, the gifts are not
revocable.
The legal effect of gifts made pursuant to a power of
attorney is determined according to State law. See Morgan v.
Commissioner, 309 U.S. 78 (1940). Oregon has not established,
either through case law or statute, a bright-line rule flatly
prohibiting gifts by attorneys-in-fact to themselves or to third
parties absent express written authorization in a power of
attorney.12 Consequently, we must examine Oregon law, and decide
12Numerous jurisdictions have adopted the rule that “an
agent lacks authority to make a gift of the principal’s property
unless that authority is expressly given by the language of the
power of attorney.” Kunewa v. Joshua, 924 P.2d 559, 565 (Haw.
Ct. App. 1996); see also Townsend v. United States, 889 F. Supp.
369, 371-372 (D. Neb. 1995); Aiello v. Clark, 680 P.2d 1162, 1166
(Alaska 1984); In re Estate of Crabtree, 550 N.W.2d 168, 170
(Iowa 1996); Whitford v. Gaskill, 480 S.E.2d 690, 692 (N.C.
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