- 17 - became irrevocable on or before September 25, 1985. The Court of Appeals reasoned as follows: The point is that when the trust was created and became irrevocable Mrs. Bryan was given the authority, under the law as it then existed, to exercise her general power of appointment in favor of anyone at all, and to do so without subjecting the transfer to a GST tax, such a tax then being far in the future. This is the sort of reliance that the effective-date provision protects. [Simpson v. United States, supra at 814- 815.] As a final matter, the Court of Appeals rejected the Commissioner’s reliance on Peterson Marital Trust, distinguishing that case on the grounds (1) it concerned the lapse of a power of appointment (as opposed to the exercise of a power of appointment), and (2) the Commissioner had relied upon a temporary Treasury regulation in Peterson Marital Trust, whereas there was no regulation applicable to the transfer in dispute in the Simpson case. Simpson v. United States, 183 F.3d at 815-816. C. Bachler v. United States In Bachler v. United States, 281 F.3d 1078 (9th Cir. 2002), revg. and remanding 126 F. Supp. 2d 1279 (N.D. Cal. 2000), another case presenting a scenario nearly identical to the instant case, the Court of Appeals for the Ninth Circuit followed the holding of the Eighth Circuit in Simpson and held the disputed transfer to the Bachler grandchildren was eligible for relief from the GST tax under TRA 1986 section 1433(b)(2)(A). The disputed transfer in Bachler occurred in 1997, and, therefore, the Court of Appeals declined to address the validityPage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011