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title of Section Five of the amended trust, “Invasion of
Principal for Surviving Spouse-Narrow Standard”, indicates that
decedent did not intend to provide the surviving spouse with an
unrestricted power of appointment. We conclude that the
trustee’s power to invade the principal is not exercisable in all
events, and, accordingly, the trustee’s power is not a qualifying
power of appointment for purposes of section 2056(b)(5). See
sec. 20.2056(b)-5(g)(3), Estate Tax Regs. Consequently, we hold
that the testamentary trust fails to qualify for the section
2056(b)(5) exception to the terminable interest rule.
Petitioner contends that Section Two of the amended trust
created a general power of appointment over the income from the
testamentary trust, under section 2041 and section 20.2041-
1(c)(1) and (2), Estate Tax Regs., and that a general power of
appointment under section 2041 is sufficient to qualify the
surviving spouse’s interest income in the testamentary trust for
section 2056(b)(5) treatment, relying on Sec. Peoples Trust Co.
v. United States, 238 F. Supp. 40, 51 (W.D. Penn 1965). The
requirements of section 2041 and section 2056(b)(5) are distinct.
A power of appointment may not be broad enough to qualify under
section 2056 even though it qualifies as a general power of
appointment for purposes of section 2041. Estate of Brantingham
v. United States, supra (no indication that section 2041 and
section 2056 apply in pari materia); see Estate of May v.
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