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Marital Fund assets to GFLP. Because decedent, on the date of
her death, continued to own, control, and use Marital Fund
assets, the value of the Marital Fund assets allegedly
transferred to GFLP, including income therefrom as of the
appropriate valuation date, must be included in decedent’s gross
estate under sections 2031(a) and 2033.
We recognize, of course, that our holding under section 2033
depends for its accuracy on our conclusion that decedent
effectively withdrew the Marital Fund assets from the Sidney Gore
Trust. Even if our conclusion is wrong, however, the value of
the Marital Fund assets would still be includable in decedent’s
gross estate because decedent, on the date of her death, had a
general power of appointment within the meaning of section
2041(a)(2) with respect to any Marital Fund assets still subject
to the Sidney Gore Trust.
Section 2041(b)(1) defines a general power of appointment as
a power exercisable in favor of the decedent, her estate, her
creditors, or the creditors of her estate. A general power of
appointment over the corpus of a trust exists where the lifetime
income beneficiary has the unrestricted power to distribute the
corpus of the trust to herself. Sec. 20.2041-3(f), Example (3),
Estate Tax Regs. In that situation, the entire corpus of the
trust as of the time of death is includable in the decedent’s
gross estate under section 2041. Secs. 20.2041-1(b)(1), 20.2041-
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Last modified: November 10, 2007