- 23 -
Commissioner, 283 F.2d 853 (2d Cir. 1960); see also Estate of
Duvall v. Commissioner, T.C. Memo. 1993-319; Condon Natl. Bank v.
United States, 349 F. Supp. 755 (D. Kan. 1972).
Section Two of the amended trust may have been sufficient to
create a power of appointment for purposes of section 2041,11 but
we have found that the terms of that provision, and other
provisions relevant in discerning testator’s intent, failed to
satisfy the conditions set forth in section 2056(b)(5) because
the surviving spouse is not entitled to all of the income from
the property and because her power to invade the trust corpus is
not exercisable at all events. Sec. 2056(b)(5); see also Estate
of Meeske v. Commissioner, supra; Estate of Lassiter, T.C. Memo.
2000-324.
We also consider whether the trust qualifies for the section
2056(b)(7) qualified terminable interest property exception to
the section 2056(b)(1) terminable interest rule. Section
2056(b)(7) was enacted as part of the Economic Recovery Tax Act
of 1981, Pub. L. 97-34, sec. 403(d)(1), 95 Stat. 172, 302. Prior
to 1981, a life estate without a power of appointment was
considered a terminable property. Estate of Clack v.
Commissioner, 106 T.C. 131 (1996); see Estate of Nicholson v.
Commissioner, 94 T.C. 666 (1990); see also Estate of Higgins v.
11We do not consider whether a power of appointment was
created by the trust document, for purposes of sec. 2041,
because that issue is not directly before us.
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