Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 30
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55health, education, support, or
Complete Schedule l and file it with
Schedule G—Transfers During
maintenance of the decedent.
the return if you answered “Yes,” to
Decedent's Life, earlier. See also
question 16 of Part 4—General
Regulations section 20.2039-1(e).
2. A power exercisable by the
Information.
decedent only in conjunction with:
If the decedent retired before
a. The creator of the power, or
Enter on Schedule I every annuity
January 1, 1985, see Annuities Under
that meets all of the conditions under
b. A person who has a substantial
Approved Plans, later, for rules that
General, later, and every annuity
interest in the property subject to the
allow the exclusion of part or all of
described in paragraphs (a) through (h)
power, which is adverse to the exercise
certain annuities.
of Annuities Under Approved Plans,
of the power in favor of the decedent.
even if the annuities are wholly or
Part Includible
A part of a power is considered a
partially excluded from the gross estate.
general power of appointment if the
If the decedent contributed only part of
For a discussion regarding the QTIP
power:
the purchase price of the contract or
treatment of certain joint and survivor
agreement, include in the gross estate
1. May only be exercised by the
annuities, see the Schedule M, line 3
only that part of the value of the annuity
decedent in conjunction with another
instructions.
receivable by the surviving beneficiary
person, and
that the decedent's contribution to the
General
2. Is also exercisable in favor of the
purchase price of the annuity or
other person (in addition to being
These rules apply to all types of
agreement bears to the total purchase
exercisable in favor of the decedent, the
annuities, including pension plans,
price.
decedent's creditors, the decedent's
individual retirement arrangements,
estate, or the creditors of the decedent's
purchased commercial annuities, and
For example, if the value of the
estate).
private annuities.
survivor's annuity was $20,000 and the
When there is a partial power, figure
decedent had contributed 75% of the
In general, you must include in the
the amount included in the gross estate
purchase price of the contract, the
gross estate all or part of the value of
by dividing the value of the property by
amount includible is $15,000 (0.75 ×
any annuity that meets the following
the number of persons (including the
$20,000).
requirements.
decedent) in favor of whom the power is
It is receivable by a beneficiary
exercisable.
following the death of the decedent and
Except as provided under Annuities
by reason of surviving the decedent;
Under Approved Plans, contributions
Date power was created. Generally, a
The annuity is under a contract or
made by the decedent's employer to the
power of appointment created by will is
agreement entered into after March 3,
purchase price of the contract or
considered created on the date of the
1931;
agreement are considered made by the
testator's death.
The annuity was payable to the
decedent if they were made by the
A power of appointment created by
employer because of the decedent's
decedent (or the decedent possessed
an inter vivos instrument is considered
employment. For more information, see
the right to receive the annuity) either
created on the date the instrument takes
section 2039(b).
alone or in conjunction with another, for
effect. If the holder of a power exercises
the decedent's life or for any period not
it by creating a second power, the
ascertainable without reference to the
Definitions
second power is considered as created
decedent's death or for any period that
at the time of the exercise of the first.
Annuity. An annuity consists of one or
did not in fact end before the decedent's
more payments extending over any
Attachments
death; and
period of time. The payments may be
The contract or agreement is not a
If the decedent ever possessed a power
equal or unequal, conditional or
policy of insurance on the life of the
of appointment, attach a certified or
unconditional, periodic or sporadic.
decedent.
verified copy of the instrument granting
the power and a certified or verified
Examples. The following are
Note. A private annuity is an annuity
copy of any instrument by which the
examples of contracts (but not
issued by a party not engaged in the
power was exercised or released. You
necessarily the only forms of contracts)
business of writing annuity contracts,
must file these copies even if you
for annuities that must be included in the
typically a junior generation family
contend that the power was not a
gross estate.
member or a family trust.
general power of appointment, and that
1. A contract under which the
the property is not otherwise includible
An annuity contract that provides
decedent immediately before death was
in the gross estate.
periodic payments to a person for life
receiving or was entitled to receive, for
and ceases at the person's death is not
the duration of life, an annuity with
Schedule I—Annuities
includible in the gross estate. Social
payments to continue after death to a
security benefits are not includible in the
designated beneficiary, if surviving the
If any assets to which the
gross estate even if the surviving
decedent.
special rule of Regulations
!
spouse receives benefits.
section 20.2010-2(a)(7)(ii)
2. A contract under which the
CAUTION
applies are reported on this schedule,
decedent immediately before death was
An annuity or other payment that is
do not enter any value in the last three
receiving or was entitled to receive,
not includible in the decedent's or the
columns. See instructions for line 10 of
together with another person, an annuity
survivor's gross estate as an annuity
Part 5—Recapitulation for information
payable to the decedent and the other
may still be includible under some other
on how to estimate and report the value
person for their joint lives, with
applicable provision of the law. For
of these assets.
payments to continue to the survivor
example, see Powers of Appointment
following the death of either.
and the instructions for
-30-
Part Instructions
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