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B. Contentions of the Parties
For purposes of the instant case, the estate concedes on
brief that “if Leona accepted the disclaimed property, the
property of Trust B is included in Leona’s gross estate under
I.R.C. secs. 2036 and 2038.” Accordingly, the dispute of the
parties centers primarily on whether decedent manifested
acceptance of the assets purportedly disclaimed within the
meaning of section 2518(b)(3).
Respondent contends that the so-called power of appointment
executed by decedent resulted in an acceptance violative of the
section 2518(b)(3) requirement. Respondent asserts that when
decedent’s exercise of the power became effective and irrevocable
at her death, “there was a ‘manifestation of ownership’ and
acceptance of the benefits of the power.” Hence, it is
respondent’s position that any subsequent disclaimer by the
executor of decedent’s estate was not qualified under section
2518.
Conversely, the estate advances three principal arguments as
to why no acceptance occurred in the circumstances here. The
estate maintains that the power of appointment did not result in
an acceptance because: (1) Execution of the power did not itself
manifest any dominion and control over the property, nor did
exercise of the power ever become effective due to the relation-
back doctrine under State law; (2) execution of the power was not
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