Estate of Pruitt v. Commissioner
| Decision Date | 12 September 2000 |
| Docket Number | Docket No. 19126-97. |
| Citation | 80 T.C.M. 348 |
| Parties | Estate of Suzanne C. Pruitt, Deceased, Sandra S. Thompson, Personal Representative v. Commissioner. |
| Court | U.S. Tax Court |
Marc K. Sellers, for the petitioner. Gerald W. Douglas, for the respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
Respondent determined a deficiency of $47,660 in petitioner's Federal estate tax. The sole issue1 for decision is whether gifts of real property made by decedent's attorney-in-fact are includable in decedent's gross estate under section 2038.2 Resolution of the issue requires us to decide whether decedent's attorney-in-fact was authorized to make the gifts in question by certain powers of attorney granted to her by decedent.
The parties have stipulated some of the facts. The stipulated facts are incorporated in our findings by this reference.
Suzanne C. Pruitt (Mrs. Pruitt or decedent) died on February 11, 1994, from complications of Alzheimer's disease. Decedent's will was admitted to probate in Oregon and decedent's United States Estate (and Generation-Skipping Transfer) Tax Return, Form 706, showed decedent's domicile in Multnomah County, Oregon. Decedent's daughter, Sandra S. Thompson (Ms. Thompson), was appointed personal representative of decedent's estate (the estate). At the time the petition was filed, Ms. Thompson resided in Troutdale, Oregon.
Prior to 1988, decedent and her husband3 engaged in estate planning discussions with their attorney, James W. Walker (Mr. Walker). Ms. Thompson attended one or two of the meetings at which the discussions took place. Mr. Walker discussed ways to reduce Mr. and Mrs. Pruitt's projected estate tax liability and advised them on the effect of the Federal gift tax, gifting schedules, and charitable donations. Mr. and Mrs. Pruitt were concerned about the considerable size of their estate and potential estate tax problems. Mr. and Mrs. Pruitt wanted their children to inherit as much of their estate as possible.
From 1980 through 1992, in accordance with Mr. Walker's advice, decedent engaged in a pattern of making gifts to her daughters, their husbands, and her grandchildren in an attempt to reduce the size of her estate. Decedent personally made all the gifts during this period. The gifts made by decedent from 1980 through 1992 were as follows:
With the exception of the November 1992 gifts, decedent transferred the gifted funds by personal check. The November 1992 gifts consisted of stock.
On December 22, 1987, pursuant to Mr. Walker's advice, decedent, while domiciled in Oregon, executed and delivered to Ms. Thompson a durable power of attorney4 (December 22, 1987, power). The December 22, 1987, power was a standard form (Form No. 853) preprinted by the Stevens-Ness Law Publishing Co., Portland, Oregon. The power appointed Ms. Thompson as attorney-in-fact and granted her specific enumerated powers. Mr. Walker advised decedent that the power would allow Ms. Thompson to do anything decedent could do. Relevant portions of the December 22, 1987, power read as follows:
KNOW ALL MEN BY THESE PRESENTS, That I, Suzanne C. Pruitt have made, constituted and appointed and by these presents do make, constitute and appoint Sandra S. Thompson my true and lawful attorney, for me and in my name, place and stead and for my use and benefit,
(1) To lease, let, grant, bargain, sell, contract to sell, convey, exchange, remise, release and dispose of any real or personal property of which I am now or hereafter may be possessed or in which I may have any right, title or interest, including rights of homestead, for any price or sum and upon such terms and conditions as to my said attorney may seem proper;
* * * * * * *
I hereby give and grant unto my said attorney full power and authority freely to do and perform every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming all that my said attorney-in-fact shall lawfully do...
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Possible tax consequences under Florida durable powers of attorney.
...to the agent or to the principal's estate. (1) Estate of Mary Catherine IX Gaynor, 82 TCM 379, 380 (2001); Estate of Suzanne C. Pruitt, 80 TCM 348, 354 (2000); Morgan v. Commissioner, 60 S.Ct. 424, 426, 309 U.S. 78 (2) LeCraw v. LeCraw, 401 S.E.2d 697 (GA, 1991). (3) Estate of Suzanne C. Pr......