they were trust beneficiaries and had the authority to pass distributions to one (or to the grantor) to the detriment of the other), they did not possess
general powers of appointment over the trust for purposes of [section]2514.
The children are given
general powers of appointment over their pro rata trust shares, but only upon the death of their mother.
Permissible Appointments Under
General Powers of AppointmentThe following powers if possessed by the income beneficiary would not be deemed
general powers of appointment for purposes of IRC Section 2041:
77) The "relation back" doctrine not only determines the inception of the time period in which trust interests must vest, but it also determines the inception of the time period in which non-general and testamentary
general powers of appointment must be exercised.
If, under the terms of the trust, the surviving spouse is given no special or
general powers of appointment except the right to receive trust income for life with the remainder to be paid to the couple's heirs, none of the trust's assets can be drawn into the surviving spouse's estate.
in defining presently exercisable
general powers of appointment held by the decedent.
So as not to confuse the agent in this regard, it might be a good idea to specifically state in the durable power of attorney that the power to exercise testamentary special and
general powers of appointment is one of those powers that the agent is expressly prohibited from exercising.
2041(a)(1) and 2514(a), the lapse or release of pre-1942
general powers of appointment are not subject to estate or gift tax).
She was entitled to all the income and had lifetime and testamentary
general powers of appointment over the trust principal.
While
general powers of appointment may present valuation problems, the regulations are clear on the treatment of special powers of appointment with respect to the TPT credit.
The "tolling" of the disclaimer period when
general powers of appointment are involved provides great flexibility in tailoring dispositive transfers involving long-term trusts.
