³²See Collin, Jr., and Ohlandt, "Gift-Giving Under Durable Powers of Attorney," 20 Tax Mgmt. Ests., Gifts and Tr. J. 63 (January/February 1995); Insel, "Durable Power Can Alleviate Effects of Client's Incapacity," 22 Est. Plng. 1 (January 1995); and Tiernan, "Gift-Giving by an Agent Under a Durable Power of Attorney," 26 Est. Plng. 372 (October 1999).

³³See Est. of Sylvia S. Swanson, 46 Fed. Cl. 388 (2000) and Sylvia P. Goldman, TC Memo 1996-29; but see Est. of Suzanne C. Pruitt, TC Memo 2000-287, Est. of Rosa B. Neff, TC Memo 1997-186, Est. of Joseph E. Ridenour, TC Memo 1993-41, and Est. of Olive D. Casey, TC Memo 1989-511, rev'd, 948 F2d 895 (4th Cir. 1991).

³⁴See Clark, "Substituted Judgment: Medical and Financial Decisions by Guardians," 24 Est. Plng. 66 (February 1997).

³⁵IRS Letter Ruling (TAM) 9731003 (3/31/97).

³⁶See IRS Letter Ruling 9736004 (6/6/97); Est. of Swanson, note 33 supra.

³⁷See Gopman and List, "Impact of the Generation-Skipping Tax on Trusts Using Crummey Powers," 26 Est. Plng. 169 (May 1999).

³⁸A thorough discussion of the GST rules is beyond the scope of this article; for more detail, see Harrington and Acker, 850 T.M., Generation Skipping Tax (BNA, 2001); Harrington, Plaine and Zaritsky, Generation-Skipping Transfer Tax (WG&L, 1996).

³⁹C.P. Brooke, 468 F2d 1155 (9th Cir. 1982)

⁴⁰See Sec. 453B and Rev. Rul. 79-371, 1979-2 CB 294. Passing the installment note to a grantor trust may avoid immediate taxation; see Rev. Rul. 74-613, 1974-2 CB 153.

⁴¹However, if the note is bequeathed to its maker, the inherent gain is immediately taxable; see Sec. 691(a)(5).

⁴²Under Sec. 453B(c), the installment deferral treatment of the note continues; the estate or the beneficiaries report the taxable gain as received.

⁴³See Est. of Aaron Levine, 634 F2d 12 (2d Cir. 1980).

⁴⁴See Est. of Daniel McNichol, 29 TC 1179 (1958), aff'd, 265 F2d 667 (3d Cir. 1959); but see Est. of Rebecca A. Wineman, TC Memo 2000-193 (a gift of a partial interest in a farm that the children operated and on which the donor remained was not a retained use).

⁴⁵See Linden and Machan, "The Disinheritors," Forbes (5/19/97) at www.forbes.com/forbes/97/0519/5910152a.htm; Kirkland, Jr., "Should You Leave it to Your Children?" Fortune (9/29/86), p. 76.

⁴⁶See Scroggin, "Family Incentive Trusts," 54 J. of Fin'l Svce. Prof'ls 74 (July 2000).

⁴⁷The following jurisdictions impose a gift tax: Connecticut, Delaware, Louisiana, New York, North Carolina, Puerto Rico and Tennessee.

⁴⁸See Hader, "Planning to Avoid the Reciprocal Trust Doctrine," 26 Est. Plng. 358 (October 1999); Barton and Sager, News & Views, "Tax Court Denies Annual Exclusion for Reciprocal Gifts," 70 CPA Journal 12 (February 2000).

⁴⁹Est. of Joseph P. Grace, 395 US 316 (1969), rev'g 393 F2d 939 (Ct. Cl. 1968); see also Est. of Robert V. Schuler, TC Memo 2000-392.

⁵⁰These rules are extremely ambiguous; thorough research should be undertaken before attempting a gift that has reciprocal-gift implications.

⁵¹Lavonna J. Stinson Est., 214 F3d 846 (2000).

⁵²Est. of Marie A. Bies, TC Memo 2000-338.

⁵³See Regs. Sec. 301.6501(c)-1(e); Kove and Kosakow, "Problems Created by New Prop. Regs. on Revaluation of Gifts," 26 Est. Plng. 165 (May 1999); Vail, Tax Clinic, "Transfer Tax Valuation Finality and Prop. Regs. on the 'Adequate Disclosure' of Gifts," 30 The Tax Adviser 388 (June 1999); Kessel and Agran, "Final Regs. on Disclosure of Gifts Liberalized, but Problems Remain," 27 Est. Plng. 147 (May 2000); Mulligan, "Adequate Disclosure: Its Impact on Gift Tax Return Strategies," 28 Est. Plng. 3 (January 2001).

⁵⁴The New York Times noted that the 1999 audit rate for gifts under $600,000 was only 0.3%, while 75.3% of gifts over $1 million were audited; see Johnston, "I.R.S. Sees Increase in Evasion of Taxes on Gifts to Heirs," NY Times (4/2/00).

⁵⁵Rev. Proc. 66-49, 1966-2 CB 1257; Regs. Sec. 301.6501(c)-1(f)(3); see also Reilly, "When the Appraiser Takes the Stand," 2 Valuation Strategies 12 (November/December 1998) and Est. of Albert L. Dougherty, TC Memo 1990-274.

⁵⁶See the Economic Growth and Tax Relief Reconciliation Act of 2001.