Estate of Carpenter v. Commissioner
United States Court of Appeals for the Fourth Circuit
52 F.3d 1266 (1995)
- Written by Angela Patrick, JD
Facts
Stanley Carpenter’s will left his wife, Ernestine Carpenter, most of his property in trust. Ernestine was named as a trustee and allowed to use the trust’s income or sell the trust’s property for anything relating to her own needs or happiness during her lifetime. The will also stated that, at Ernestine’s death, any remaining trust property would pass fully to Nancy Reid, Stanley’s daughter from a prior marriage. When Stanley died, Ernestine and Reid disagreed about how to interpret the will. The conflict was settled with each woman receiving half of Stanley’s assets outright. When Stanley’s estate (plaintiff) filed its federal estate tax return, it claimed a marital deduction for the nonterminable property interests that it had transferred to Ernestine. The federal government (defendant) disallowed the estate’s marital deduction, contending that (1) the applicability of the marital deduction was controlled by the will’s bequest and (2) the will transferred only a terminable trust interest that did not include a general power of appointment. The estate petitioned for a new determination, but the Tax Court denied the petition. The estate appealed.
Rule of Law
Issue
Holding and Reasoning (Motz, J.)
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