without descendants, the power would not be in existence on the date of the decedent's death if the condition precedent to its exercise had not The Tax Court interpreted this regulation to conclude occurred.”). that the decedent could have some control over the contingency and still not have a general power of appointment, but the contingency must not be and must have independent significant non-tax “illusory” consequences: event or contingency must not be illusory and must have “…the some significant non-tax consequence independent of the ability to exercise the think any illusory decedent’s power.… We or sham restriction placed on a power of appointment should be ignored. An event or condition that has no significant non-tax consequence independent of a decedent's power to appoint the property for his own benefit is illusory.” The Tax Court analogized to the contingency provisions under §2038, and gave two examples of situations involving independent consequences: example, for purposes of section 2038, a power is “For disregarded if it becomes operational as a mere by-product of an event, the non-tax consequences of which greatly overshadow its significance for tax purposes. See Bittker & Lokken, Federal Taxation of Income, Estates and Gifts, par. 126.5.4, at 126-64 (2d ed. 1984). If the power involves acts of "independent significance", whose effect on the trust is "incidental and collateral", such acts are also deemed to be beyond the decedent's control. See Rev. Rul. 80-255, 1980-2 C.B. 272 (power to bear or adopt children involves act of "independent significance", whose effect on a trust that included after-born and after-adopted children was "incidental and collateral"); see also Estate of Tully v. United States, 208 Ct. Cl. 596, 528 F.2d 1401, 1406 [ AFTR2d 76-1529] (1976) ("In reality, a man might divorce his wife, but to assume that he would fight through an entire divorce process merely to alter employee death benefits approaches the absurd."). Thus, if a power is contingent upon an event of substantial independent consequence that the decedent could, but did not,
without descendants, the power would not be in existence on the date of the decedent's death if the condition precedent to its exercise had not occurred.”). The Tax Court interpreted this regulation to conclude that the decedent could have some control over the contingency and still not have a general power of appointment, but the contingency must not be “illusory” and must have independent significant non-tax consequences: “…the event or contingency must not be illusory and must have some significant non-tax consequence independent of the decedent’s ability to exercise the power.… We think any illusory or sham restriction placed on a power of appointment should be ignored. An event or condition that has no significant non-tax consequence independent of a decedent's power to appoint the property for his own benefit is illusory.” The Tax Court analogized to the contingency provisions under §2038, and gave two examples of situations involving independent consequences: “For example, for purposes of section 2038, a power is disregarded if it becomes operational as a mere by-product of an event, the non-tax consequences of which greatly overshadow its significance for tax purposes. See Bittker & Lokken, Federal Taxation of Income, Estates and Gifts, par. 126.5.4, at 126-64 (2d ed. 1984). If the power involves acts of "independent significance", whose effect on the trust is "incidental and collateral", such acts are also deemed to be beyond the decedent's control. See Rev. Rul. 80-255, 1980-2 C.B. 272 (power to bear or adopt children involves act of "independent significance", whose effect on a trust that included after-born and after-adopted children was "incidental and collateral"); see also Estate of Tully v. United States, 208 Ct. Cl. 596, 528 F.2d 1401, 1406 [ AFTR2d 76-1529] (1976) ("In reality, a man might divorce his wife, but to assume that he would fight through an entire divorce process merely to alter employee death benefits approaches the absurd."). Thus, if a power is contingent upon an event of substantial independent consequence that the decedent could, but did not,