Best v. United States

902 F.Supp. 1023 (1995)

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Nature of the Case

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Facts

Alfred executed his 'Last Will and Testament.' On January 19, 1967, he died testate. Alfred appointed Alma, who was Alfred's surviving spouse, and their son, John, as trustees of the testamentary trust established by Alfred's will. The trustees were authorized to distribute assets of the trust to Alma. Upon Alma's death, the trust corpus was distributable to the Anderson children, Kathleen and John, or to their heirs. The trustees could distribute principal as may be reasonably necessary for Alma's comfort, support, and maintenance. Alma and John qualified as trustees. However, John died. After Alma was discharged as trustee on September 1, 1983, the Omaha National Bank was appointed as the successor trustee. Alma died on March 26, 1989. Best (P), as personal representative of Alma's estate, paid $242,761 in federal estate taxes. The IRS notified P that a deficiency in payment of taxes was assessed against the estate for $381,007 plus $122,995 in interest. The IRS included in the gross estate the value of the corpus of the testamentary trust, namely, shares of stock in Anderson Equipment Company valued at $944,390. P paid the IRS $504,006. P filed a 'Claim for Refund and Request for Abatement' with the IRS. The IRS disallowed P's claim on the ground that Alma held a general power of appointment over the trust corpus rather than a power of appointment limited by an ascertainable standard or a power exercisable in conjunction with a person with an adverse interest. P sued for a refund contending the trust conferred an invasionary power limited by an ascertainable standard. P moved for summary judgment.