Estate Of Kurz v. Commissioner

68 F.3d 1027 (7th Cir. 1995)

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Nature of the Case

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Facts

Kurz had the right to two trusts and received the income from each. The principal disposition was as follows. One entitled the family trust was limited to 5% withdrawal in any one year of the principal; the other entitled the marital trust allowed her to take all the principal just by requesting such disposition from the trustee but only if the marital trust was exhausted. When Kurz died, the marital trust had $3.5 million, and the family trust had $3.4 million. The tax return for the estate included the whole value of the marital trust and none of the family trust. The Tax Court held that Kurz had a general power of appointment over 5 percent of the family trust requiring inclusion of another $170,000 for a tax due of approximately $31,000.