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potential for “self-dealing” that exists when an agent acting
pursuant to a durable power of attorney has the power to make
gifts, especially after the principal becomes incapacitated, and
we agree that we must be wary when asked to infer from a power of
attorney a power to make gifts when the attorney-in-fact has made
the gifts in question to herself and to individuals related to
her. See Wilkinson v. Commissioner, T.C. Memo. 1993-336.
Acknowledging, as we must, that a decision inferring a power to
make gifts from the general language of a durable power of
attorney must be made with great caution, we nevertheless must
decide this case based on the best information available to us
and our review of applicable State law. After reviewing Oregon
law and examining the decisions of the Supreme Court of Oregon,
this Court, and other courts for guidance, we are convinced that
a decision to infer the power to make gifts from the general
language of a durable power of attorney is warranted in this case
because (1) there is no case law or statute in the controlling
jurisdiction prohibiting an inferred power to make gifts, (2) the
controlling jurisdiction considers the principal’s intention in
interpreting the power of attorney, (3) there is a substantial
pattern of gifting by the principal preceding the gifts made by
the attorney-in-fact, (4) the gifts made by the attorney-in-fact
are consistent with the principal’s prior gifting, (5) the gifts
do not deplete the principal’s assets to the principal’s
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