SCOTUS Reports

Tag: Section 2038

  • Estate of Wall v. Commissioner, 101 T.C. 307 (1993): When a Settlor’s Power to Replace a Trustee Does Not Result in Estate Tax Inclusion

    Estate of Wall v. Commissioner, 101 T. C. 307 (1993)

    A settlor’s power to replace a corporate trustee with another independent corporate trustee does not constitute a retained power sufficient to include trust assets in the settlor’s gross estate under sections 2036(a)(2) or 2038(a)(1) of the Internal Revenue Code.

    Summary

    In Estate of Wall, the Tax Court ruled that the assets of three irrevocable trusts created by Helen Wall were not includable in her gross estate for estate tax purposes. Wall had retained the power to remove the corporate trustee and appoint another independent corporate trustee, but the court found this did not amount to control over the beneficial enjoyment of the trust assets. The decision hinged on the principle that a settlor’s power to replace a trustee does not equate to a legally enforceable power to control the trust’s administration, especially when the trustee’s actions are governed by fiduciary duties to the beneficiaries. This ruling clarifies that for estate tax purposes, the ability to change trustees without altering the trust’s terms or beneficiaries’ rights does not result in estate inclusion.

    Facts

    Helen Wall established three irrevocable trusts for her daughter and granddaughters, with First Wisconsin Trust Co. as the initial trustee. The trust agreements allowed Wall to remove the trustee and appoint another independent corporate trustee. Wall transferred assets to these trusts between 1979 and 1986, reporting the transfers on gift tax returns. After Wall’s death in 1987, the IRS sought to include the trust assets in her estate, arguing that her power to replace the trustee was equivalent to retaining control over the trust’s assets under sections 2036(a)(2) and 2038(a)(1) of the Internal Revenue Code. Wall had never exercised her power to replace the trustee.

    Procedural History

    The estate filed a Federal estate tax return excluding the trust assets, leading to an IRS deficiency notice. The estate then petitioned the Tax Court for a redetermination of the deficiency, arguing that the trust assets should not be included in Wall’s gross estate.

    Issue(s)

    1. Whether Helen Wall’s retained power to remove the corporate trustee and appoint another independent corporate trustee constitutes a power to designate the persons who shall possess or enjoy the trust property or its income under section 2036(a)(2).
    2. Whether the same power constitutes a power to alter, amend, revoke, or terminate the enjoyment of the trust property under section 2038(a)(1).

    Holding

    1. No, because Wall’s power to replace the trustee with another independent corporate trustee did not amount to an ascertainable and legally enforceable power to control the beneficial enjoyment of the trust property.
    2. No, because the power to replace the trustee did not affect the “enjoyment” of the trust property as contemplated by section 2038(a)(1).

    Court’s Reasoning

    The court applied the Supreme Court’s definition from United States v. Byrum that a retained “right” under section 2036(a)(2) must be an ascertainable and legally enforceable power. The court rejected the IRS’s argument that Wall’s power to replace the trustee implied control over the trust’s administration. The court emphasized that a corporate trustee, such as First Wisconsin, is bound by fiduciary duties to act in the beneficiaries’ best interest, not the settlor’s. The court also noted that the trust agreements did not allow Wall to appoint herself as trustee, further distinguishing this case from precedents where settlors retained such powers. The court cited Estate of Beckwith and Byrum to support its conclusion that the power to replace a trustee with another independent trustee does not equate to retained control over the trust’s assets. The court found no evidence of any prearrangement or understanding between Wall and the trustee that would suggest indirect control over the trust’s administration.

    Practical Implications

    This decision provides clarity for estate planners and taxpayers on the inclusion of trust assets in the gross estate. It establishes that a settlor’s power to replace a corporate trustee with another independent corporate trustee does not, by itself, result in estate tax inclusion under sections 2036(a)(2) or 2038(a)(1). This ruling may influence how trusts are structured to avoid estate tax, particularly in cases where the settlor wishes to maintain some control over the trustee but not the trust’s assets. The decision also reinforces the importance of fiduciary duties in trust administration, highlighting that trustees must act in the beneficiaries’ interests, regardless of the settlor’s ability to change trustees. Subsequent cases may cite Estate of Wall when addressing similar issues of settlor control and estate tax inclusion.

  • Estate of Graves v. Commissioner, 92 T.C. 1294 (1989): Exclusion of Pre-1931 Trusts from Gross Estate

    Estate of Annabel Dye Graves v. Commissioner of Internal Revenue, 92 T. C. 1294 (1989)

    A pre-1931 trust transfer is not includable in the decedent’s gross estate under section 2036(c) even if the decedent retained certain powers over the trust.

    Summary

    In Estate of Graves, the decedent created an irrevocable trust in 1927, retaining income rights and the power to designate beneficiaries, which she relinquished in 1945. The Tax Court ruled that the trust corpus was not includable in her gross estate under sections 2036 and 2038. The court determined that the 1927 transfer qualified for exclusion under section 2036(c) as it occurred before March 4, 1931, and post-1945, the decedent retained no power to alter, amend, or revoke the trust, thus not falling under section 2038. This case clarifies the application of these estate tax provisions to pre-1931 trusts and highlights the importance of the timing and nature of powers retained by the settlor.

    Facts

    Annabel Dye Graves established a trust in 1927 with a corpus of $100,000, retaining the right to trust income, the power to designate beneficiaries, and various rights over the trustee. She expressly relinquished the right to revoke the trust in favor of herself or her husband. In 1945, Graves released her power to designate beneficiaries. Upon her death in 1983, the IRS sought to include the trust corpus in her gross estate under sections 2036 and 2038 of the Internal Revenue Code.

    Procedural History

    The estate filed a motion for summary judgment in the United States Tax Court, contesting the IRS’s inclusion of the trust in the gross estate. The IRS filed a cross-motion for summary judgment. The Tax Court granted the estate’s motion, ruling that the trust corpus was not includable under sections 2036 and 2038.

    Issue(s)

    1. Whether the 1927 transfer to the trust qualifies for exclusion from the decedent’s gross estate under section 2036(c).
    2. Whether the trust corpus is includable in the decedent’s gross estate under section 2038 due to the powers retained by the decedent at her death.

    Holding

    1. Yes, because the transfer occurred in 1927, prior to March 4, 1931, and thus qualifies for exclusion under section 2036(c).
    2. No, because after 1945, the decedent retained no power to alter, amend, or revoke the trust, and thus the trust corpus is not includable under section 2038.

    Court’s Reasoning

    The court applied section 2036(c), which excludes pre-1931 trust transfers from the gross estate if the settlor retained income rights or the right to designate beneficiaries. The court held that the 1927 transfer was irrevocable and thus qualified for the exclusion. The court distinguished this case from Commissioner v. Estate of Talbott, emphasizing that Graves had no express power to revoke the trust in her favor. Regarding section 2038, the court analyzed each power retained by the decedent at her death, concluding none amounted to a power to alter, amend, or revoke the trust. The court cited Estate Tax Regulations and case law to support its conclusion that the powers were managerial and fiduciary in nature, not altering the beneficial interests in the trust.

    Practical Implications

    This decision clarifies that pre-1931 trusts, even with retained powers over income and beneficiary designation, can be excluded from the gross estate under section 2036(c). Practitioners should carefully review the timing and nature of powers retained in pre-1931 trusts to determine their tax implications. The case also underscores that post-1945, a settlor’s retained powers must amount to a true power to alter, amend, or revoke to trigger inclusion under section 2038. This ruling has been influential in subsequent cases involving similar trusts and continues to guide estate planning and tax litigation involving pre-1931 trusts.

  • Estate of Siegel v. Commissioner, 74 T.C. 613 (1980): Estate Tax Inclusion of Employment Contract Payments

    Estate of Murray J. Siegel, Deceased, Frederick Zissu and Norman Lipshie, Executors, Petitioner v. Commissioner of Internal Revenue, Respondent, 74 T.C. 613 (1980)

    Payments to a decedent’s children under an employment contract are not includable in the gross estate under Section 2039 if the decedent’s right to disability payments was considered wage continuation and not post-employment benefits, but are includable under Section 2038 if the decedent retained the power to alter the beneficiaries’ enjoyment in conjunction with the employer.

    Summary

    The Tax Court addressed whether payments to the children of Murray J. Siegel under an employment contract with Vornado, Inc. were includable in his gross estate for federal estate tax purposes. Siegel’s contract provided for salary continuation in case of disability and payments to his children upon his death. The court held that the payments were not includable under Section 2039 because the disability payments were deemed wage continuation, not post-employment benefits. However, the court found the payments includable under Section 2038 because Siegel retained the power, in conjunction with Vornado, to modify the children’s rights under the agreement, constituting a power to alter, amend, revoke, or terminate the transfer.

    Facts

    Murray J. Siegel, president and CEO of Vornado, Inc., entered into an employment agreement that commenced on October 1, 1965, and was extended through amendments to November 30, 1979. The agreement stipulated that if Siegel died or became disabled during the term, Vornado would pay his salary to him or his children. Specifically, in case of death or disability, his children would receive monthly payments equivalent to his salary for the remainder of the contract term. The agreement also contained a clause stating that the children’s rights could be modified by mutual consent of Siegel and Vornado. Siegel died on September 21, 1971, while actively employed, and his children became entitled to the payments. The estate excluded the commuted value of these payments from the gross estate.

    Procedural History

    The Estate of Murray J. Siegel petitioned the Tax Court to contest the Commissioner of Internal Revenue’s determination that the commuted value of payments to Siegel’s children under the employment contract should be included in the decedent’s gross estate for federal estate tax purposes. This case was heard in the United States Tax Court.

    Issue(s)

    1. Whether the commuted value of payments to decedent’s children under the employment contract is includable in decedent’s gross estate under Section 2039(a) because decedent had a right to receive post-employment disability benefits under the contract.
    2. Whether the commuted value of payments to decedent’s children is includable in decedent’s gross estate under Section 2038(a)(1) because decedent retained a power to alter, amend, or revoke his children’s rights under the employment contract.

    Holding

    1. No, because the agreement did not provide for post-employment benefits; the disability payments were considered wage continuation, contingent upon continued service to the best of his ability, not an annuity or other post-employment payment under Section 2039(a).
    2. Yes, because the provision in the agreement allowing decedent and Vornado to mutually consent to modify the children’s rights constituted a retained power to alter, amend, revoke, or terminate the enjoyment of the transferred property under Section 2038(a)(1).

    Court’s Reasoning

    Section 2039 Issue: The court reasoned that Section 2039(a) includes in the gross estate the value of an annuity or other payment receivable by beneficiaries if the decedent possessed the right to receive an annuity or other payment. The critical question was whether the disability payments under Siegel’s contract constituted ‘post-employment benefits’ or merely ‘wage continuation.’ The court emphasized that ‘annuity or other payment’ under Section 2039 does not include regular salary or wage continuation plans. The court found that the agreement, interpreted in light of Vornado’s practices and the ongoing service obligation of Siegel even during disability, indicated that disability payments were intended as wage continuation. The court distinguished this case from *Bahen’s Estate v. United States* and *Estate of Schelberg v. Commissioner*, noting that in those cases, disability benefits were more clearly post-employment benefits, not tied to a continuing service obligation. The court admitted parol evidence to clarify the terms of the agreement, finding it was not fully integrated regarding the definition of ‘disability’ and ‘termination of employment due to disability.’

    Section 2038 Issue: The court determined that Section 2038(a)(1) includes in the gross estate property transferred by the decedent if the enjoyment was subject to change through the decedent’s power to alter, amend, revoke, or terminate. Paragraph Fifth of the employment agreement explicitly stated that the children’s rights were ‘subject to any modification of this agreement by the mutual consent of Siegel and the Corporation.’ The court rejected the estate’s argument that this clause merely reflected standard contract law allowing parties to renegotiate. The court distinguished *Estate of Tully v. United States* and *Kramer v. United States*, where no such express reservation of power existed. The court reasoned that by explicitly reserving the power to modify the children’s rights with Vornado’s consent, Siegel retained a greater power than what would exist under general contract law, making the transfer revocable under Section 2038(a)(1). The court noted that under New Jersey law and the Restatement of Contracts, third-party beneficiary rights become indefeasible unless a power to modify is expressly reserved, which was done here.

    Practical Implications

    This case clarifies the distinction between wage continuation and post-employment benefits under Section 2039 for estate tax purposes. It highlights that disability payment provisions in employment contracts may not trigger estate tax inclusion under Section 2039 if they are genuinely tied to continued service obligations during disability, rather than being considered retirement-like benefits. However, *Estate of Siegel* serves as a crucial reminder that explicitly reserving a power to modify beneficiary rights in an agreement, even if seemingly reflecting general contract law, can have significant estate tax consequences under Section 2038. Legal practitioners drafting employment contracts with death benefit provisions must carefully consider the wording regarding modification rights and the nature of disability payments to avoid unintended estate tax inclusion. This case emphasizes the importance of clear and unambiguous language in contracts, especially concerning estate tax implications, and the potential pitfalls of explicitly stating powers that might otherwise be implied under general law.

  • Estate of Craft v. Commissioner, 68 T.C. 249 (1977): Parol Evidence Rule in Tax Court & Grantor Retained Powers

    Estate of Craft v. Commissioner, 68 T.C. 249 (1977)

    In cases before the Tax Court requiring state law interpretation of legal rights and interests in written instruments, the state’s parol evidence rule, considered a rule of substantive law, will be applied to determine the admissibility of extrinsic evidence.

    Summary

    The Tax Court addressed whether trust assets were includable in a decedent’s gross estate and the deductibility of executor’s fees. The decedent had created a trust, retaining the power to add beneficiaries and alter beneficial interests. The court held that these retained powers caused the trust assets to be included in the gross estate under sections 2036 and 2038 of the IRC. The court also addressed the admissibility of parol evidence to contradict the trust terms, establishing that state parol evidence rules apply in Tax Court when interpreting state law rights. Finally, the court allowed the deduction of the full executor’s fees as an administration expense, finding the Florida non-claim statute inapplicable.

    Facts

    James E. Craft (decedent) established a trust in 1945, naming himself as trustee and transferring property into it along with his wife and two sons. The trust instrument reserved to the grantors (including decedent) the right to add beneficiaries and change beneficial interests, excluding decedent as a beneficiary. Decedent resigned as trustee shortly after and appointed successors. Upon his death in 1969, the trust assets remained for the benefit of two minor children. Decedent’s will specified a $5,000 executor fee for his son, Thomas Craft. However, Thomas performed substantial executor duties exceeding initial expectations and was later awarded $63,722.66 in executor fees by a Florida Probate Court.

    Procedural History

    The Commissioner of Internal Revenue determined a deficiency in estate tax, arguing for inclusion of the trust assets in the gross estate and limiting the deduction for executor’s fees to $5,000. The Estate of Craft petitioned the Tax Court, contesting these determinations.

    Issue(s)

    1. Whether the value of assets in a trust, where the grantor (decedent) retained the power to add beneficiaries and change beneficial interests, is includable in the decedent’s gross estate under sections 2036 and 2038 of the Internal Revenue Code.
    2. Whether extrinsic evidence should be admitted to interpret the trust instrument and determine the decedent’s intent regarding retained powers, despite the parol evidence rule.
    3. Whether executor’s fees of $63,722.66, as approved by a Florida Probate Court but exceeding the $5,000 specified in the will, are fully deductible as an administration expense under section 2053(a)(2) of the Internal Revenue Code, or limited to $5,000 due to Florida’s non-claim statute.

    Holding

    1. Yes, because the decedent retained the power to designate who would enjoy the trust property, the trust assets are includable in his gross estate under sections 2036(a)(2) and 2038(a)(1).
    2. No, because under West Virginia law (governing the trust), the trust instrument was unambiguous and therefore, the parol evidence rule, as a rule of substantive law, bars extrinsic evidence to contradict its clear terms.
    3. Yes, because executor’s fees are considered administration expenses and not claims against the estate under Florida law, the Florida non-claim statute does not apply, and the Probate Court-approved fees are deductible under section 2053(a)(2).

    Court’s Reasoning

    The court reasoned that the express language of the trust instrument clearly reserved to the grantors, including the decedent, the power to add new beneficiaries and to change the distributive shares. Citing Lober v. United States, the court affirmed that such powers trigger inclusion under sections 2036 and 2038. Regarding parol evidence, the court addressed conflicting approaches within the Tax Court concerning the parol evidence rule. It explicitly adopted the approach that when the Tax Court must determine state law rights and interests, it will apply the state’s parol evidence rule as a rule of substantive law. The court found the trust instrument unambiguous under West Virginia law, thus excluding extrinsic evidence of contrary intent. For the executor’s fees, the court distinguished between “claims or demands” and “expenses of administration” under Florida probate law. It held that executor’s fees are administration expenses, not subject to the Florida non-claim statute’s 6-month filing deadline. The court relied on authorities from other jurisdictions supporting this distinction and allowed the full deduction as approved by the Florida Probate Court.

    Practical Implications

    Estate of Craft provides critical guidance on the application of the parol evidence rule in Tax Court, particularly in estate tax cases involving interpretations of wills and trusts governed by state law. It clarifies that the Tax Court, when determining state law rights, will adhere to state-specific parol evidence rules, treating them as substantive law. This decision limits the admissibility of extrinsic evidence in Tax Court when state law dictates its exclusion due to unambiguous written instruments. The case also reinforces the importance of carefully drafting trust instruments to avoid unintended retained powers that could trigger estate tax inclusion. Furthermore, it distinguishes between claims and administration expenses in probate, impacting the deductibility of executor’s fees and similar costs, particularly concerning state non-claim statutes. Later cases must consider both federal tax law and applicable state law, including evidentiary rules, when litigating estate tax issues related to trusts and estate administration expenses.

  • Estate of Bell v. Commissioner, 66 T.C. 729 (1976): Inclusion of Trust Assets in Gross Estate When Trustee Power Lacks Objective Standard

    Estate of Nathalie F. Bell, Deceased, Gilbert H. Osgood and Chicago Title and Trust Co. , Executors, Petitioners v. Commissioner of Internal Revenue, Respondent, 66 T. C. 729; 1976 U. S. Tax Ct. LEXIS 73

    The value of trust assets is includable in the decedent’s gross estate under section 2038(a)(1) when the decedent, as a trustee, holds a power to distribute corpus without an objective standard.

    Summary

    Nathalie F. Bell transferred a Treasury note and cash to a trust where she served as a cotrustee. The trust allowed the trustees to distribute corpus for the beneficiary’s benefit, a power that lacked an objective standard. The Tax Court held that the value of the trust assets attributable to Bell’s contributions was includable in her gross estate under section 2038(a)(1) because she retained a power to alter the enjoyment of the transferred property. The court determined the includable value by excluding assets traceable to other contributors, resulting in $13,636. 28 being added to her estate.

    Facts

    Nathalie F. Bell, a resident of Illinois, died on February 24, 1971. She was a cotrustee of the Helen de Freitas Trust, established by her husband, Laird Bell, for their daughter. On December 26, 1950, Nathalie transferred a $5,000 U. S. Treasury note and $1,500 in cash to the trust, which constituted 0. 98% of the trust’s value at that time. The trust allowed the trustees to distribute corpus to the beneficiary for a home, business, or any other purpose believed to be for her benefit. At her death, the trust’s assets had significantly appreciated, primarily due to contributions and stock splits from Laird Bell’s original transfers.

    Procedural History

    The Commissioner of Internal Revenue determined a deficiency in Bell’s estate tax, asserting that the value of the trust assets attributable to her contributions should be included in her gross estate under sections 2036(a)(2) and 2038. The executors of Bell’s estate petitioned the Tax Court, arguing that her power as a trustee was subject to an objective standard and thus not includable. The Tax Court rejected this argument and held for the Commissioner under section 2038(a)(1).

    Issue(s)

    1. Whether the value of assets transferred by Nathalie F. Bell to the trust is includable in her gross estate under section 2038(a)(1) due to her power as a cotrustee to distribute corpus without an objective standard.
    2. If includable, what is the fair market value of those assets as of the alternate valuation date of August 24, 1971?

    Holding

    1. Yes, because the power held by Bell as a cotrustee to distribute corpus for any purpose believed to be for the beneficiary’s benefit lacked an objective standard, making the value of her transferred assets includable in her gross estate under section 2038(a)(1).
    2. The includable value of the trust assets as of August 24, 1971, is $13,636. 28, after excluding assets traceable to Laird Bell’s contributions.

    Court’s Reasoning

    The court found that the trust’s provisions allowing corpus distribution for the beneficiary’s benefit were not subject to an external standard enforceable in a court of equity. The language “for any other purpose believed by the Trustees to be for her benefit” was deemed too broad to constitute an objective standard, thus falling under section 2038(a)(1). The court rejected the argument that the terms “home” and “business” provided an objective standard, noting the unlimited discretion given to the trustees. The court also excluded assets traceable to Laird Bell from the valuation, focusing only on assets directly attributable to Nathalie’s contributions.

    Practical Implications

    This decision clarifies that when a decedent retains a power over trust corpus without an objective standard, the value of transferred property is includable in the gross estate under section 2038(a)(1). Practitioners must carefully draft trust instruments to ensure that any powers retained by the grantor or trustees are subject to clear, objective standards to avoid estate tax inclusion. The ruling also demonstrates the importance of tracing assets to determine the includable value accurately, especially in trusts with multiple contributors. Subsequent cases have applied this principle, emphasizing the need for precise drafting to avoid unintended tax consequences.

  • Estate of James v. Commissioner, 19 T.C. 1013 (1953): Inclusion of Trust Assets in Gross Estate Where Decedent Retained Power to Revoke

    19 T.C. 1013 (1953)

    The value of a trust corpus is includible in a decedent’s gross estate under Section 811(d)(2) of the Internal Revenue Code when the decedent, as settlor, retained the power to revoke the trust until his death, even if another person initially had to join in the revocation.

    Summary

    Arthur Curtiss James and his wife created a trust in 1915, funded solely by Arthur, for the benefit of his wife’s sister, reserving the right to revoke jointly and then by the survivor. Arthur survived his wife by three weeks and died in 1941. The Tax Court held that the value of the trust corpus was includible in Arthur’s gross estate under Section 811(d)(2) of the Internal Revenue Code, because he possessed the power to revoke the trust at the time of his death, regardless of the initial requirement of joint revocation. The court emphasized that the regulations did not exclude the trust assets since Arthur possessed an unfettered power of revocation at the time of death.

    Facts

    In 1911, Arthur Curtiss James purchased bonds and transferred them to a trust for his wife’s sister, Maud Larson, reserving the right to cancel the trust jointly with his wife. In 1915, the trust was canceled, and the bonds were returned to Arthur and his wife. On the same day, Arthur and his wife executed a new trust agreement, funded with the same bonds and $75,000 of Arthur’s funds, again naming Maud Larson as beneficiary and reserving the right to revoke, jointly or by the survivor. The trust was never altered or revoked. Arthur’s wife predeceased him by approximately three weeks. The value of the trust corpus on the optional valuation date was $84,252.26.

    Procedural History

    The Commissioner of Internal Revenue determined a deficiency in Arthur Curtiss James’ estate taxes. The executor, United States Trust Company of New York, contested the deficiency in the Tax Court, arguing the trust corpus should not be included in the gross estate. Maud Larson’s successor in interest intervened. The Tax Court ruled in favor of the Commissioner, holding the trust corpus was includible in the gross estate.

    Issue(s)

    Whether the value of the corpus of a trust, established by the decedent who retained the power to revoke either jointly with his wife or, as the survivor, alone, is includible in the decedent’s gross estate under Section 811(d)(2) of the Internal Revenue Code when the decedent survived his wife and possessed the power to revoke the trust at the time of his death.

    Holding

    Yes, because at the time of the decedent’s death, he possessed the power to revoke the trust alone, making the trust corpus includible in his gross estate under Section 811(d)(2) of the Internal Revenue Code.

    Court’s Reasoning

    The court reasoned that Section 811(d)(2) explicitly applied because the enjoyment of the trust property was subject to change through the exercise of a power by the decedent alone to alter, amend, or revoke at the date of his death. The court found that the decedent alone contributed the corpus of the trust, even though his wife was a co-settlor. The court distinguished Treasury Regulations 105, section 81.20(b), noting that the regulations primarily addressed transfers made before the Revenue Act of 1924, where the retained power was conditioned upon the assent of a person having a substantial adverse interest, which persisted until the decedent’s death. The court cited Commissioner v. Hofheimer’s Estate, which held that Section 302(d) of the Revenue Act of 1926 (comparable to Section 811(d)) could be applied to an earlier transfer when the power was exercisable by the decedent alone. The court stated, “Here there was a long period after the death of Arthur when the decedent could have alone exercised the power That is the power which his death cut off and as to that the statute is not retroactive.” The court found any challenge based on retroactivity to be without merit because of the decedent’s power of revocation at the time of death.

    Practical Implications

    This case clarifies that even if a trust initially requires joint action for revocation, the trust assets will be included in the grantor’s gross estate if the grantor possesses the unilateral power to revoke at the time of death. This reinforces the importance of carefully considering the estate tax implications of retaining powers over trusts. Attorneys drafting trust documents must advise clients that retaining the power to revoke, even if initially shared, will likely result in the inclusion of the trust assets in the grantor’s taxable estate. This case is consistently cited in estate tax litigation where a decedent retained a power to alter, amend, revoke, or terminate a trust, highlighting the continuing relevance of Section 2038 of the Internal Revenue Code (the successor to Section 811(d)(2)).