IRS written determination 201444004

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201444004
Release Date: 10/31/2014
Index Number: 2041.00-00, 2041.03-00
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Re: ---------------------------------------
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
--------------------, ID No. ----------------
Telephone Number:
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Refer Reply To:
CC:PSI:B4
PLR-104177-14
Date:
July 14, 2014
Legend
Settlor=------------------
Grandchild=----------------------------
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Trust=-----------------------------------------------------------------------
------ ----------------
Date=------------------
Dear ---------------:
This letter responds to your letter dated October 22, 2013, submitted on your behalf by
your authorized representative, requesting a ruling on the application of §2041(a) of the
Internal Revenue Code.
Facts
Settlor died on Date. Grandchild is the beneficiary of Trust, a trust created under
Article10C of Settlor’s last will. Paragraph 1 of Article 10C provides that during
Grandchild’s life, the trustees of Trust are to make discretionary payments of the net
income and principal to or for the benefit of Grandchild and Grandchild’s issue.
Paragraph 2 of Article 10C provides that upon the death of Grandchild, the trustees of
Trust are to pay over the principal, as then constituted, and any accumulated or
undistributed income, “to such among [Settlor’s] issue” as Grandchild shall validly
appoint in Grandchild’s last will. Any balance of Trust remaining and not effectively
appointed by Grandchild in Grandchild’s last will is disposed of pursuant to
paragraphs2 and 3 of Article 10C of Settlor’s last will.

PLR-104177-14
2
Rulings Requested
Grandchild has requested the following rulings:
1. The testamentary power of appointment granted to Grandchild in Trust does not
constitute a general power of appointment within the meaningof § 2041(b)(1);
and
2. The existence, exercise, failure to fully exercise, or partial or complete release of
Grandchild’s power to appoint the principal and any accumulated or undistributed
income of Trust will not cause the value of the property in Trust to be included in
Grandchild’s gross estate under §2041(a).
Law and Analysis
Section 2041(a)(2) provides that the value of the gross estate includes the value of all
property with respect to which the decedent has at the time of his death a general
power of appointment created after October 21, 1942, or with respect to which the
decedent has at any time exercised or released such a power of appointment by a
disposition which is of such nature that if it were a transfer of property owned by the
decedent, the property would be includible in the decedent’s gross estate under
§§ 2035 to 2038, inclusive. For purposes of §2041(a)(2), the power of appointment is
considered to exist on the date of the decedent’s death even though the exercise of the
power is subject to a precedent giving of notice or even though the exercise of the
power takes effect only on the expiration of a stated period after its exercise, whether or
not on or before the date of the decedent’s death notice has been given or the power
has been exercised.
Section 2041(b)(1) provides, with exceptions not relevant here, that the term “general
power of appointment” means a power that is exercisable in favor of the decedent, his
estate, his creditors, or the creditors of his estate.
Section 20.2041-1(c)(1) of the Estate Tax Regulations provides that the term “general
power of appointment” as defined in §2041(b)(1) means any power of appointment
exercisable in favor of the decedent, his estate, his creditors, or the creditors of his
estate. Section 20.2041-1(c)(1)(a) provides that a power of appointment is not a
general power if by its terms it is exercisable only in favor of one or more designated
persons or classes other than the decedent or his creditors, or the decedent’s estate or
the creditors of his estate.
In this case, Grandchild may appoint by will the principal and accumulated or
undistributed income of Trust to the class consisting of Settlor’s issue. Because
Grandchild’s power of appointment is a testamentary power, Grandchild may not
appoint any part of Trust to Grandchild or to Grandchild’s creditors during Grandchild’s
life. In addition, based on the terms of Trust, the reference to “such among [Settlor’s]

PLR-104177-14
3
issue” as a permissible class of appointees of Grandchild’s testamentary power is
properly viewed as not including Grandchild’s estate or the creditors of Grandchild’s
estate after Grandchild’s death.
Accordingly, based on the information submitted and the representations made, we
conclude that: (1)Grandchild’s testamentary power of appointment over the principal
and accumulated or undistributed income of Trust does not constitute a general power
of appointment within the meaning of §2041(b)(1) and (2) the existence, exercise,
failure to fully exercise, or partial or completerelease of Grandchild’s power to appoint
the principal and accumulated or undistributed income of Trust will not cause the value
of the property in Trust to be included in Grandchild’s gross estate under §2041(a).
Except as expressly provided herein, noopinion is expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the
Internal Revenue Code provides that it may not be used or cited as precedent.
In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representative.
The rulings contained in this letter are based upon information and representations
submitted by the taxpayer and accompanied by a penalty of perjury statement executed
by an appropriate party. While this office has not verified any of the material submitted
in support of the request for rulings, it is subject to verification on examination.
Sincerely,
Melissa C. Liquerman
Chief, Branch 4
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)
Enclosures (2)
Copy of this letter
Copy for § 6110 purposes
cc: