Estate of Vissering v. Commissioner,
990 F.2d 578


Procedure: Petitioner estate appealed a decision of the United States Tax Court, which held that at his death decedent held a general power of appointment, under 26 U.S.C.S. § 2041, and which required the assets of a trust be included in his gross estate for federal estate tax purposes.

Facts:The trust at issue was created by the decedent's mother. Under the terms of the trust, decedent was a co-trustee as well as a beneficiary. The trust authorized the trustees to pay any amount of the principal to the beneficiaries which the trustees deemed to be 'required for the continued comfort, support, maintenance or education' of the beneficiaries. Based on mis language, the IRS found mat the decedent had powers over the trust corpus, unrestrained by any ascertainable standard, which permitted him to invade it for his own benefit. In making mis determination, they focused on the language relating to the 'comfort' of the beneficiaries. The IRS therefore included the trust corpus in the decedent's gross estate.

Analysis: Decedent was co-trustee of a trust that allowed invasion to the extent "required for the continued comfort, support, maintenance, or education " of the decedent. Petitioner estate challenged a tax court decision which held that at his death decedent held a general power of appointment, under 26 U.S.C.S. § 2041, and which required the assets of the trust be included in his gross estate for federal estate tax purposes. The appellate court reversed holding that under Treas. Reg. § 20.2041-1(c)(2), the terms "required for the continued comfort" limited decedent's ability to invade the trust, subject to an ascertainable standard. Therefore, the court determined that decedent did not have a general power of appointment and the assets of the trust were not includable in decedent's gross estate for federal estate tax purposes.

Disposition: The appellate court reversed holding that under treasury regulations the terms "required for the continued comfort" found in the trust document limited decedent's ability to invade the trust, subject to an ascertainable standard. Therefore, the court determined that decedent did not have a general power of appointment.