Estate of Eleanor R. Gerson, Deceased, Allan D. Kleinman, Executor - Page 8

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          trust are held by skip persons.  Secs. 2613(a)(1) and (2), 2651.            
               In the case of a direct skip (other than a direct skip from            
          a trust), liability for GST tax falls on the transferor.  Sec.              
          2603(a)(3).  The term “transferor” means the decedent in the case           
          of any property subject to Federal estate tax.  Sec. 2652(a)(1).            
          The flush language of section 2652(a)(1) provides that “An                  
          individual shall be treated as transferring any property with               
          respect to which such individual is the transferor.”                        
               As a general rule, if a decedent holds a general power of              
          appointment over property at death, the value of such property is           
          included in the decedent’s gross estate for Federal estate tax              
          purposes under section 2041.  With exceptions not pertinent to              
          our discussion, a general power of appointment means “a power               
          which is exercisable in favor of the decedent, his estate, his              
          creditors, or the creditors of his estate”.  Sec. 2041(b)(1).3              
               GST tax generally applies to any generation-skipping                   
          transfer made after October 22, 1986.  TRA 1986 sec. 1431(a).               
          However, TRA 1986 section 1433(b)(2)(A) provides special                    
          transitional rules or “grandfather” provisions excepting certain            
          transfers from the reach of the GST tax.  TRA 1986 section                  
          1433(b)(2)(A) provides:                                                     


               3  It follows that a decedent who dies holding a general               
          power of appointment over property is treated as the transferor             
          of that property for purposes of GST tax.  See 5 Bittker &                  
          Lokken, Federal Taxation of Income, Estates & Gifts, par. 133.2.2           
          at 133-6 to 133-7 (2d ed. 1993).                                            




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