U.S. Code » Title 26 » Subtitle Subtitle B— Estate and Gift Taxes › Chapter CHAPTER 11— ESTATE TAX › Subchapter Subchapter A— Estates of Citizens or Residents › Part PART III— GROSS ESTATE

26 U.S.C. § 2041

Powers of appointment

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(a) In generalThe value of the gross estate shall include the value of all property—(1) Powers of appointment created on or before October 21, 1942To the extent of any property with respect to which a general power of appointment created on or before October 21, 1942, is exercised by the decedent—(A) by will, or(B) by a disposition which is of such nature that if it were a transfer of property owned by the decedent, such property would be includible in the decedent’s gross estate under sections 2035 to 2038, inclusive;but the failure to exercise such a power or the complete release of such a power shall not be deemed an exercise thereof. If a general power of appointment created on or before October 21, 1942, has been partially released so that it is no longer a general power of appointment, the exercise of such power shall not be deemed to be the exercise of a general power of appointment if—(i) such partial release occurred before November 1, 1951, or(ii) the donee of such power was under a legal disability to release such power on October 21, 1942, and such partial release occurred not later than 6 months after the termination of such legal disability.(2) Powers created after October 21, 1942

To the extent of any property with respect to which the decedent has at the time of his death a general power of appointment created after October 21, 1942, or with respect to which the decedent has at any time exercised or released such a power of appointment by a disposition which is of such nature that if it were a transfer of property owned by the decedent, such property would be includible in the decedent’s gross estate under sections 2035 to 2038, inclusive. For purposes of this paragraph (2), the power of appointment shall be considered to exist on the date of the decedent’s death even though the exercise of the power is subject to a precedent giving of notice or even though the exercise of the power takes effect only on the expiration of a stated period after its exercise, whether or not on or before the date of the decedent’s death notice has been given or the power has been exercised.

(3) Creation of another power in certain casesTo the extent of any property with respect to which the decedent—(A) by will, or(B) by a disposition which is of such nature that if it were a transfer of property owned by the decedent such property would be includible in the decedent’s gross estate under section 2035, 2036, or 2037,exercises a power of appointment created after October 21, 1942, by creating another power of appointment which under the applicable local law can be validly exercised so as to postpone the vesting of any estate or interest in such property, or suspend the absolute ownership or power of alienation of such property, for a period ascertainable without regard to the date of the creation of the first power.(b) DefinitionsFor purposes of subsection (a)—(1) General power of appointmentThe term “general power of appointment” means a power which is exercisable in favor of the decedent, his estate, his creditors, or the creditors of his estate; except that—(A) A power to consume, invade, or appropriate property for the benefit of the decedent which is limited by an ascertainable standard relating to the health, education, support, or maintenance of the decedent shall not be deemed a general power of appointment.(B) A power of appointment created on or before October 21, 1942, which is exercisable by the decedent only in conjunction with another person shall not be deemed a general power of appointment.(C) In the case of a power of appointment created after October 21, 1942, which is exercisable by the decedent only in conjunction with another person—(i) If the power is not exercisable by the decedent except in conjunction with the creator of the power—such power shall not be deemed a general power of appointment.(ii) If the power is not exercisable by the decedent except in conjunction with a person having a substantial interest in the property, subject to the power, which is adverse to exercise of the power in favor of the decedent—such power shall not be deemed a general power of appointment. For the purposes of this clause a person who, after the death of the decedent, may be possessed of a power of appointment (with respect to the property subject to the decedent’s power) which he may exercise in his own favor shall be deemed as having an interest in the property and such interest shall be deemed adverse to such exercise of the decedent’s power.(iii) If (after the application of clauses (i) and (ii)) the power is a general power of appointment and is exercisable in favor of such other person—such power shall be deemed a general power of appointment only in respect of a fractional part of the property subject to such power, such part to be determined by dividing the value of such property by the number of such persons (including the decedent) in favor of whom such power is exercisable.For purposes of clauses (ii) and (iii), a power shall be deemed to be exercisable in favor of a person if it is exercisable in favor of such person, his estate, his creditors, or the creditors of his estate.(2) Lapse of powerThe lapse of a power of appointment created after October 21, 1942, during the life of the individual possessing the power shall be considered a release of such power. The preceding sentence shall apply with respect to the lapse of powers during any calendar year only to the extent that the property, which could have been appointed by exercise of such lapsed powers, exceeded in value, at the time of such lapse, the greater of the following amounts:(A) $5,000, or(B) 5 percent of the aggregate value, at the time of such lapse, of the assets out of which, or the proceeds of which, the exercise of the lapsed powers could have been satisfied.(3) Date of creation of power

For purposes of this section, a power of appointment created by a will executed on or before October 21, 1942, shall be considered a power created on or before such date if the person executing such will dies before July 1, 1949, without having republished such will, by codicil or otherwise, after October 21, 1942.

(Aug. 16, 1954, ch. 736, 68A Stat. 385; Pub. L. 87–834, § 18(a)(2)(H), Oct. 16, 1962, 76 Stat. 1052; Pub. L. 94–455, title XX, § 2009(b)(4)(A), Oct. 4, 1976, 90 Stat. 1894.)Editorial NotesAmendments

1976—Subsec. (a)(2). Pub. L. 94–455 struck out provision that a disclaimer or renunciation of a power of appointment not be deemed a release of that power.

1962—Subsec. (a). Pub. L. 87–834 struck out provisions which excepted real property situated outside of the United States.

Statutory Notes and Related SubsidiariesEffective Date of 1976 Amendment

Amendment by Pub. L. 94–455 applicable to transfers creating an interest in person disclaiming made after Dec. 31, 1976, see section 2009(e)(2) of Pub. L. 94–455, set out as a note under section 2518 of this title.

Effective Date of 1962 Amendment

Amendment by Pub. L. 87–834 applicable to estates of decedents dying after Oct. 16, 1962, except as otherwise provided, see section 18(b) of Pub. L. 87–834, set out as a note under section 2031 of this title.

Notes of Decisions
Cited in 110 cases (3 in the last 5 years), 1935–2025 · leading case: E. Norman Peterson Marital Trust, Chem. Bank, Tr. v. Comm'r of Internal Revenue, 78 F.3d 795 (2d Cir. 1996).
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E. Norman Peterson Marital Trust, Chem. Bank, Tr. v. Comm'r of Internal Revenue, 78 F.3d 795 (2d Cir. 1996). · cites it 4× “Because she held a general testamentary power of appointment over the marital trust, the entire value of the trust was included in her gross estate pursuant to 26 U.S.C. § 2041 . In her will, Mrs. Peterson exercised the power to direct that the estate tax attributable to the…”
In Re Harris Testamentary Trust, 69 P.3d 1109 (Kan. 2003). · cites it 3× “According to their argument, the entire corpus of the Trust may be included in his estate upon his death unless the trustees’ discretionary powers under Paragraph (e) are limited by an ascertainable standard pursuant to Internal Revenue Code (IRC) provision, 26 U.S.C. § 2041…”
Sharpe v. United States, 607 F. Supp. 4 (E.D. Va. 1984). · cites it 5× “In the opinion of the court this question turns on the reasonableness of the government’s contention that, by imputation, a general power of appointment existed in the plaintiff/decedent as those powers are defined in 26 U.S.C. § 2041 (b). In this case the government has…”
Carlson v. Sweeney, Dabagia, Donoghue, Thorne, Janes & Pagos, 868 N.E.2d 4 (Ind. Ct. App. 2007). · cites it 5× “26 U.S.C. § 2041 (a)(2). On July 27,1994, Sweeney, at the direction of the Carlsons, filed a Petition to Reform Testamentary Trust.”
Boeving v. United States, 493 F. Supp. 665 (E.D. Mo. 1980). · cites it 7× “Subsequent to the filing of the original federal estate tax return on April 7, 1975, *667 the Internal Revenue Service determined that the Ethyle Boeving Trust property was, at her death, subject to Ethyle's power of appointment within the meaning of 26 U.S.C. § 2041 , the…”
Pennsylvania Bank & Trust Co. v. United States, 451 F. Supp. 1296 (W.D. Pa. 1978). · cites it 4× “” 26 U.S.C. § 2041 (a)(2). A general power of appointment is defined as “a power which is exercisable in favor of the decedent, his estate, his creditors, or the creditors of his estate.”
Best v. United States, 902 F. Supp. 1023 (D. Neb. 1995). · cites it 13× “For the refund, Best contends that (1) Alma Anderson did not possess a testamentary general power of appointment, but, instead, held a power limited by an ascertainable standard related to the health, education, support, or maintenance of a decedent, see 26 U.S.C. § 2041…”
John C. Brantingham, of the Est. of Beatrice F. Brantingham v. United States, 631 F.2d 542 (7th Cir. 1980). · cites it 3× “The Commissioner based the inclusion of the life estate in Beatrice Brantingham’s gross estate on 26 U.S.C. § 2041 , which provides that a decedent’s gross estate shall include “.”
Pfannenstiehl v. Pfannenstiehl, 55 N.E.3d 933 (Mass. 2016). “Under IRS regulations, a beneficiary’s interest in a trust is included in that beneficiary’s taxable estate if the beneficiary has a general power of appointment through which he or she controls the distribution of the trust principal, but is excluded from the taxable estate if…”
Hemphill v. Shore, 289 P.3d 1173 (Kan. 2012). · cites it 2× “See 26 U.S.C. § 2041 (b)(1)(A) (2006) (gross taxable estate of deceased person does not include trust assets decedent could have consumed, invaded, appropriated for own benefit during lifetime, if power of appointment limited by ascertainable standards related to person’s…”
Phyllis W. Finlay, Co-Ex'x, & Phil B. Whitaker, Substitute Co-Ex'r, of the Est. of Mary Louise Finlay v. United States, 752 F.2d 246 (6th Cir. 1985). · cites it 5× “It ruled first that the trust was not invalid by reason of a merger of the legal and equitable estates in the person of Mary Louise Finlay. The government has not appealed from this ruling.”
John M. Simpson & Sarah S. Dean, Trs. of the Grover M. Simpson Testamentary Trust a v. United States, 183 F.3d 812 (8th Cir. 1999). · cites it 3× “She thus had a general power of appointment by will, and upon her death the remaining corpus of the trust was included in her estate for purposes of the federal estate tax, see 26 U.S.C. § 2041 . Mrs. Bryan made her will in 1982.”
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— 26 U.S.C. § 2041(a)(2) — 1 case
Cyrus Q. Stewart, Jr., & William L. Stewart, as Executors of the Will of Mildred L. Stewart, Deceased v. The United States of Am., 512 F.2d 269 (5th Cir. 1975).
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