Rev. Rul. 77-182

Five years prior to death, a decedent created an irrevocable trust that provided for trust income to be distributed among the decedent's children at such times and in such amounts as the corporate trustee deemed proper in its sole discretion. The trust will terminate at the death of the last surviving child and the corpus will be paid to certain named persons if living or to their estates if they are then deceased. Under the trust terms, the decedent held the power, for life, to appoint a successor corporate trustee if the original trustee resigned or was removed by judicial process.

Held, the value of the trust assets at the date of death of the decedent is not includible in the decedent's gross estate under section 2036 of the Internal Revenue Code of 1954 as property transferred by the decedent subject to a retained power to designate the person or persons who shall enjoy the property or its income. The decedent's power to appoint a successor corporate trustee in the event of resignation or removal of the original trustee did not amount to a power to remove the original trustee that, in effect, would have endowed the decedent with the trustee's discretionary control over trust income. Cf. Rev. Rul. 73-21, 1973-1 C.B. 405.