Tax Law Update 2008-09-01 (1)Tax Law Update 2008-09-01 (1)
A beneficiary did not hold general powers of appointment. In Private Letter Ruling 200832015 (issued March 26, 2008), a trust was created for the benefit of the taxpayer. The trust was grandfathered from generation-skipping transfer tax. The taxpayer was granted a testamentary power of appointment in favor of members of the family, who were defined to include the grantor's children and their descendants.
September 1, 2008
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP
A beneficiary did not hold general powers of appointment.
In Private Letter Ruling 200832015 (issued March 26, 2008), a trust was created for the benefit of the taxpayer. The trust was grandfathered from generation-skipping transfer tax. The taxpayer was granted a testamentary power of appointment in favor of “members of the family,” who were defined to include the grantor's children and their descendants. The taxpayer, a grandchild of the grantor, requested a ruling that the power of appointment is not a general power of appointment within the meaning of Internal Revenue Code Section 2041(b)(1).
Because the power was testamentary and could not be exercised during the t...
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