-43-
To the extent of any interest therein of which the
decedent has at any time made a transfer (except in
case of a bona fide sale for an adequate and full
consideration in money or money’s worth), by trust or
otherwise, where the enjoyment thereof was subject at
the date of his death to any change through the
exercise of a power (in whatever capacity exercisable)
by the decedent alone or by the decedent in conjunction
with any other person (without regard to when or from
what source the decedent acquired such power), to
alter, amend, revoke, or terminate, or where any such
power is relinquished during the 3-year period ending
on the date of the decedent’s death.
Regulations promulgated under the statute clarify that section
2038 does not apply:
(1) To the extent that the transfer was for an
adequate and full consideration in money or money’s
worth (see � 20.2043-1);
(2) If the decedent’s power could be exercised
only with the consent of all parties having an interest
(vested or contingent) in the transferred property, and
if the power adds nothing to the rights of the parties
under local law; or
(3) To a power held solely by a person other than
the decedent. * * * [Sec. 20-2038-1(a), Estate Tax
Regs.]
B. Burden of Proof
Typically, the burden of disproving the existence of an
agreement regarding a retained interest has rested on the estate,
and this burden has often been characterized as particularly
onerous in intrafamily situations. Estate of Maxwell v.
Commissioner, supra at 594; Estate of Reichardt v. Commissioner,
supra at 151-152; Estate of Rapelje v. Commissioner, supra at 86.
In this case, however, the section 2036 and 2038 issues were not
Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 NextLast modified: May 25, 2011