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specific to Mr. Engelman’s property; and (3) execution of the
document should not be characterized as the exercise of a power
of appointment, due to the extent of decedent’s rights in Trust
A.
C. Analysis
The estate’s point that execution of the power of
appointment did not itself constitute an acceptance rests on
Example (7) of section 25.2518-(2)(d)(4), Gift Tax Regs., which
provides:
Example (7). On January 1, 1980, A created an
irrevocable trust in which B was given a testamentary
general power of appointment over the trust’s corpus.
B executed a will on June 1, 1980, in which B provided
for the exercise of the power of appointment. On
September 1, 1980, B disclaimed the testamentary power
of appointment. Assuming the remaining requirements of
section 2518(b) are satisfied, B’s disclaimer of the
testamentary power of appointment is a qualified
disclaimer.
From the foregoing example, the estate deduces that execution of
a revocable instrument providing for the exercise of a
testamentary power of appointment effective at death does not
preclude a later disclaimer of such power. Yet respondent does
not argue otherwise, pointing out that merely executing an
ambulatory instrument does not constitute acceptance because the
instrument is subject to revision.
Nor does there seem to be any significant disagreement
between the parties about the corollary principle that an
exercise of a power of appointment which has become effective may
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