The lapse of a Crummey demand power is treated as a release of a general power of appointment
to the extent that the lapsed withdrawal right exceeds the five-and-five rule.
The 76/77 rulings addressed whether any trust assets were includible in a deceased trustee's gross estate as being subject to a general power of appointment
126) Section 2514(b) provides that the execution or lapse of a general power of appointment
is deemed a transfer of property by gift.
3(a), essentially rely on the main tax definition for a general power of appointment
Otherwise, the grantor's spouse will possess a general power of appointment
over the trust property, causing it to be included in the spouse's estate.
The IRC defines a general power of appointment
as a power which is exercisable in favor of the decedent, his estate, his creditors, or the creditors of his estate.
Subject to the exceptions noted below, the income beneficiary would be deemed to hold a general power of appointment
if she had the power to invade the trust corpus for the benefit of herself, her estate, her creditors, or the creditors of her estate (any one of the foregoing is sufficient).
In many states, such a general reference to powers of appointment is construed as being sufficient to include that property and, in some states, the residuary clause need not even refer to powers of appointment to exercise a general power of appointment
3) Property passing under a general power of appointment
exercised by the will.
To accomplish this, there could be a savings clause in which a non-skip beneficiary is given a testamentary general power of appointment
if a generation-skipping transfer would occur at the death of the non-skip beneficiary.
A general power of appointment
trust is an alternative to a qualified terminable interest property (QTIP) trust for obtaining the estate tax marital deduction.
Cutting back the general power of appointment
to a limited power of appointment continues to satisfy the grantor's desire to benefit his descendants but does not subject the child's share to estate tax upon his or her subsequent death.