The opinion of the court was delivered by: HUYETT
This is a suit for recovery of U.S. Federal Estate taxes which plaintiff claims were illegally collected by defendant from plaintiff who is administrator d.b.n.c.t.a. of the estate of Ethel B. McIlvaine (decedent). Plaintiff seeks to recover the estate tax paid on the value of the corpus of a residuary trust established by decedent's husband in his will. The trust corpus was determined by the Internal Revenue Service to be includible in the decedent's gross estate because of a general power of appointment, within the meaning of 26 U.S.C. § 2041, the decedent was claimed to have by virtue of a power given her as a trustee to invade corpus. It is plaintiff's contention that (1) a general power of appointment did not exist since at the time of decedent's death there was no trust in existence, and (2) even if a general power of appointment did exist over the corpus of the trust, that power was limited by an ascertainable standard. The facts have been stipulated to by the parties, and this opinion represents our findings of fact and conclusions of law as required by Fed. R. Civ. P. 52. Jurisdiction is specifically conferred by 28 U.S.C. § 1346(a) (1).
William S. McIlvaine (testator) died on May 13, 1959 leaving a Will dated November 2, 1949 and a Codicil thereto dated April 12, 1950. The Will and Codicil were admitted to probate on May 20, 1959, and letters testamentary were issued on the same date to the testator's widow, Ethel B. McIlvaine, the Fidelity-Philadelphia Trust Company, and an individual known as George E. Slaughter. In his Will, William S. McIlvaine established both a "marital" and a "non-marital" trust; the "non-marital" trust was of the residue of his estate, and was established as follows:
" ITEM: All the rest, residue and remainder of my estate, both real and personal, of whatsoever nature and character, and wheresoever situate at the time of my decease, I give, devise and bequeath unto my Trustees, hereinafter named, IN TRUST, NEVERTHELESS, to invest the same, and to keep the same invested, and to pay the net income derived therefrom quarter annually unto my wife, Ethel B. McIlvaine, for and during the full term of her natural life; and I authorize and empower my Trustees in the exercise of their uncontrolled discretion to also pay to my said wife, Ethel B. McIlvaine, such part or parts of the principal of said trust fund as may be necessary for her comfort, maintenance and support, or in the event of illness, accident or other case of necessity or emergency as the result of which she may be in need, or for her proper and reasonable funeral expenses in the event of the insufficiency of her individual estate for such purpose; and for the exercise of such discretion my said Trustees shall be without any liability or accountability whatsoever.
And upon the death of my said wife, Ethel B. McIlvaine, or upon my death, should my said wife predecease me, the then corpus or principal of my said residuary estate I give, devise and bequeath as follows, to wit:
A full equal one-half part or share thereof unto my brother, John W. McIlvaine, absolutely, if he be then living, and if he be then deceased, then as hereinafter provided for the remaining one-half thereof.
And the remaining full equal one-half part or share thereof, equally, share and share alike, absolutely, unto my nephew, Stewart Robinson, and my niece, Ruth Robinson Adams (children of my sister, Marguerite McIlvaine Robinson) or to the survivor of them, and to the issue of either of them who may then be deceased, such issue to take by representation, however, the share or shares his, her or their parent or parents would have taken if then living."
In addition to appointing the decedent as a co-executor of his estate, William S. McIlvaine also appointed the decedent as a co-trustee with Slaughter and the Fidelity-Philadelphia Trust Company of the two trusts established in his Will and Codicil thereto.
An account of the executors of William S. McIlvaine's estate, covering the period from May 15, 1959 to September 8, 1961 was called for audit in the Orphans' Court of Philadelphia County, Pennsylvania on November 6, 1961. On November 30, 1961 an Adjudication was filed confirming NISI the account, and awarding the balance of the estate to decedent, Slaughter and the Fidelity-Philadelphia Trust Company "in trust for the uses and purposes set forth in the Will." The Adjudication also granted the executors leave to make all necessary transfers and assignments and ordered that a Schedule of Distribution in conformity with the Adjudication be submitted to the Auditing Judge within ninety (90) days after the absolute confirmation of the account. The Adjudication of November 30, 1961 became final on December 15, 1961 pursuant to a Philadelphia Orphans' Court rule. The Schedule of Distribution required by the Adjudication could not have been filed and would not have been accepted until the absolute confirmation of the Adjudication on December 15, 1961.
Ethel B. McIlvaine, the decedent, died on January 5, 1962. At the time of the decedent's death the Schedule of Distribution required by the Adjudication of her husband's estate had not been filed, and no transfer or assignment of the assets of her husband's estate to any trust or trustees had been made by the executors of that estate. Nor was the Schedule of Distribution ever filed. In subsequent proceedings in the Orphans' Court the Adjudication was opened and a Re-Adjudication was filed on October 4, 1962, which awarded the balance of residue directly to the remainderman of the residuary trust without the intervention of a trustee or a trust. In effect the trust established by William S. McIlvaine's Will and Codicil never came into existence.
On April 15, 1966, a deficiency in the estate tax in the amount of $30,085.77 together with interest of $3,762.48 (for a total of $33,848.25) was assessed against the decedent's estate. A timely claim for refund of the additional estate tax and interest thereon was filed on March 7, 1967. Plaintiff claims that the Internal Revenue Service erred in including in decedent's gross estate the residuary ("non-marital") trust created under the Will of her deceased husband, William S. McIlvaine.
II. General Power of Appointment
Section 2041(a) (2) of the Internal Revenue Code of 1954, 26 U.S.C. provides for inclusion in the gross estate of a decedent the value of all property the extent to which the decedent "has at the time of his death a general power of appointment created after October 21, 1942."