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b. Constraints upon rights to designate
The Supreme Court in United States v. Byrum, supra, relied
upon several impediments to the exercise of powers held by
Mr. Byrum in concluding that such powers did not warrant
inclusion under section 2036(a)(2). Here, the rights held by
decedent are of a different nature and were not accompanied by
comparable constraints. In our view, the constraints alleged by
the estate are illusory.
One circumstance highlighted by the Supreme Court was the
existence of an independent trustee with the sole authority
ultimately to pay or withhold income from the trust. Here, in
contrast, no similar layer of independence was interposed.
Rather, decisions with respect to distributions were placed in
Stranco, of which decedent owned 47 percent and was the largest
shareholder. All decisions ultimately were made by Mr. Gulig,
who continued to act as decedent’s attorney in fact.
Another element stressed by the Supreme Court was the manner
in which the flow of funds allegedly under Mr. Byrum’s control
would be subject to economic and business realities consequent
upon the status of the relevant corporations as typical small
operating enterprises. Earnings and dividends of a small
operating company could be affected by, inter alia, changes in
products, in competition, or in industry regulation and outlook;
use of funds for replacement of plant and equipment or for growth
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