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States, 428 F.2d 538, 544-545 (5th Cir. 1970); Estate of Edelman
v. Commissioner, 38 T.C. 972, 976-977 (1962); see also Martin v.
United States, 780 F.2d 1147, 1148 n.1 (4th Cir. 1986); Condon
Natl. Bank v. United States, 349 F. Supp. 755, 759-760 (D. Kan.
1972); sec. 20.2041-1(c), Estate Tax Regs.
II. Did Decedent Possess a General Power of Appointment Over the
Marital Trust Property?
A. The Parties’ Positions
As discussed below, the court of special appeals has ruled
that Mr. Posner’s will granted decedent no testamentary power of
appointment over the marital trust property. Respondent does not
dispute that ruling. Respondent contends, however, that Mr.
Posner’s will granted decedent an inter vivos general power of
appointment over the marital trust property so as to make it
includable in her gross estate pursuant to section 2041(a). The
estate argues that under applicable Maryland law, as adjudicated
by the court of special appeals, decedent possessed no power of
appointment over the marital trust property. Accordingly, the
estate contends, inclusion of the marital trust property in
decedent’s gross estate, as reported on the estate’s estate tax
return, was in error.
B. Decisions of the Maryland Courts
State law, which creates legal interests and rights in
property, including powers of appointment, determines the nature,
scope, and validity of such legal interests and rights. See
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