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allegation. First, respondent maintains that the explicit
language of the trust agreement precludes any argument that a
disclaimer not effective under section 2518 can, nonetheless, be
effective under State law to bring into operation the provisions
of Trust B. The trust instrument states that allocation to Trust
B would occur in the event that the surviving settlor
“effectively disclaims (under Code Section 2518 or any successor
provision then in effect)”. The estate counters that the
foregoing terms create no express requirement but only an
inference, alerting the trustee to be aware of the statute.
Second, respondent contends that even if the disclaimer was
effective under State law, the property at issue passed to Trust
B as a result of a discretionary act of the executor in making
the disclaimer, and not because of an act by decedent. It is
respondent’s position that decedent’s own actions in executing
the power of appointment and her subsequent death caused all
property to be treated at that time as subject to the Trust A
provisions. To this point, the estate once again responds with
reference to the relation-back doctrine.
Third, with respect to the distribution to the State of
Israel, respondent avers that a deduction is not allowable in any
event because Trust B provides only for an unrestricted gift.
Accordingly, respondent characterizes the gift as having failed
the requirement that the donor restrict use of a gift made to a
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