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in the property to support the granting of a separate power of
appointment in the same property.” Rather, the estate would have
us view decedent’s rights over Trust A as a power to alter,
amend, or revoke the trust.1
However, California by statute provides an exception to the
doctrine of merger:
If a trust provides for one or more successor
beneficiaries after the death of the settlor, the trust
is not invalid, merged, or terminated in either of the
following circumstances:
* * * * * * *
(b) Where there are two or more settlors, one or
more of whom are trustees, and the beneficial interest
in the trust is in one or more of the settlors during
the lifetime of the settlors. [Cal. Prob. Code sec.
15209 (West 1991).]
Operation of this statute is illustrated by Ammco Ornamental
Iron, Inc. v. Wing, 31 Cal. Rptr. 2d 564 (Ct. App. 1994). There,
upon his mother’s death, Mr. Wing became the sole trustee of a
trust with respect to which he held a life income interest; a
power to invade principal for support, health, or maintenance;
and a testamentary power of appointment exercisable in favor of
any persons other than himself, his estate, or his creditors.
Id. at 566-567. If Mr. Wing failed to exercise the power of
1 We further note that acceptance of the premises underlying
this argument could lead to inclusion of the assets of the living
trust, in their entirety, in decedent’s gross estate under other
rules, such as those which can apply under secs. 2031 and 2033 as
though decedent owned the property outright.
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