- 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 validity
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