Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A., (2000)
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Estate of Henry A. Lassiter, deceased, Paula Ann Masters Lassiter, administrator, C.T.A., (2000)
T.C. Memo. 2000-324
UNITED STATES TAX COURT ESTATE OF HENRY A. LASSITER, DECEASED, PAULA ANN MASTERS LASSITER, ADMINISTRATOR, C.T.A., Petitioner v.COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 17643-98. Filed October 19, 2000.D executed a will in 1970 which set forth a testamentary plan placing the majority of D's property into two trusts. The terms of one trust are such that a marital deduction is available for assets passing thereto. The other, residuary, trust does not as written satisfy the requirements for such a deduction, largely by reason of interests therein granted to persons other than D's surviving spouse. Following D's death in 1994, beneficiaries of his estate executed a series of disclaimers in an attempt to enable the residuary trust to qualify for the marital deduction under sec. 2056(b)(7), I.R.C. When this deduction was claimed for Federal estate tax purposes, it was disallowed by R.Held: The estate is entitled to a deduction pursuant to sec. 2056(b)(7), I.R.C., for property placed in the residuary trust established under D's 1970 will.David D. Aughtry and Charles E. Hodges II, for petitioner. David Delduco and Clinton M. Fried, for respondent.MEMORANDUM OPINION NIMS, Judge: Respondent determined a Federal estate tax deficiency in the amount of $14,330,496 for the Estate of Henry A. Lassiter (the estate). Pursuant to Rule 122, the parties have submitted fully stipulated the sole issue of whether, after giving effect to various disclaimers, the estate is entitled to a deduction under section 2056(b)(7) with respect to an interest transferred in trust from Henry A. Lassiter (Mr. Lassiter or decedent) to his surviving spouse. If this legal question is answered in the negative, further proceedings will be required to establish the value of certain property held by Mr. Lassiter at the time of his death.Unless otherwise indicated, all section references are to sections of the Internal Revenue Code in effect as of the date of decedent's death, and all Rule references are to the Tax Court Rules of Practice and Procedure.Background As this case was submitted fully stipulated, the facts are so found. The stipulations of the parties, with accompanying exhibits, are incorporated herein by this reference. We set forth below such factual information as is useful in understanding our decision.Mr. Lassiter was a citizen of the United States and a domiciliary of Clayton County, Georgia, when he was killed in an automobile accident while in Singapore on May 9, 1994. He was 48 years of age. His surviving spouse, Paula Ann Masters Lassiter (Mrs. Lassiter), is the administrator of the estate. At the time the petition in this case was filed, Mrs. Lassiter resided in Morrow, Georgia. The estate has at all relevant times been administered by the Probate Court of Clayton County, Georgia (Probate Court).In addition to his wife, Mr. Lassiter was also survived by their four daughters: Cathy Lassiter Smith (Cathy), Cindy Elaine Lassiter (Cindy), Christy Lynn Lassiter (Christy), and Cheryl Marie Lassiter (Cheryl). As of the date of their father's death, Cathy, Cindy, Christy, and Cheryl were 25, 23, 19, and 15 years of age, respectively, and Cathy was married to Paul A. Smith.The Testamentary Disposition On May 26, 1994, an order and letters of administration were issued by the Probate Court admitting to probate a will of Mr. Lassiter dated August 7, 1970. The 1970 will, in addition to providing for payment of debts and burial expenses and making specific bequests of personal effects, set forth a testamentary plan establishing two trusts to be funded by the remainder of Mr. Lassiter's probate assets. Item IV of the will specified the amount to be placed in a trust over which Mrs. Lassiter was given a general power of appointment by directing the trustee to: (1) determine the value of my entire estate passing under this Will, (2) add thereto the value of any and all insurance and other property passing outside of this Will but includable in my estate for Federal Estate Tax purposes, (3) deduct therefrom all debts and expenses of administration allowed as a deduction for Federal Estate Tax purposes but not any estate or in...See the full content of this document
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