Instructions For Form 706 - 2016 Page 30
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54A part of a power is considered a
even if the annuities are wholly or
Part Includible
general power of appointment if the
partially excluded from the gross estate.
If the decedent contributed only part of
power:
the purchase price of the contract or
For a discussion regarding the QTIP
1. May only be exercised by the
agreement, include in the gross estate
treatment of certain joint and survivor
decedent in conjunction with another
only that part of the value of the annuity
annuities, see the Schedule M, line 3
person and
receivable by the surviving beneficiary
instructions.
that the decedent's contribution to the
2. Is also exercisable in favor of the
General
purchase price of the annuity or
other person (in addition to being
agreement bears to the total purchase
exercisable in favor of the decedent, the
These rules apply to all types of
price.
decedent's creditors, the decedent's
annuities, including pension plans,
estate, or the creditors of the decedent's
individual retirement arrangements,
For example, if the value of the
estate).
purchased commercial annuities, and
survivor's annuity was $20,000 and the
private annuities.
When there is a partial power, figure
decedent had contributed three-fourths
the amount included in the gross estate
In general, you must include in the
of the purchase price of the contract, the
by dividing the value of the property by
gross estate all or part of the value of
amount includible is $15,000 (
×
3
4
the number of persons (including the
any annuity that meets the following
$20,000).
decedent) in favor of whom the power is
requirements:
exercisable.
It is receivable by a beneficiary
Except as provided under Annuities
following the death of the decedent and
Under Approved Plans, contributions
Date power was created. Generally, a
by reason of surviving the decedent;
made by the decedent's employer to the
power of appointment created by will is
The annuity is under a contract or
purchase price of the contract or
considered created on the date of the
agreement entered into after March 3,
agreement are considered made by the
testator's death.
1931;
decedent if they were made by the
A power of appointment created by
The annuity was payable to the
employer because of the decedent's
an inter vivos instrument is considered
decedent (or the decedent possessed
employment. For more information, see
created on the date the instrument takes
the right to receive the annuity) either
section 2039(b).
effect. If the holder of a power exercises
alone or in conjunction with another, for
it by creating a second power, the
the decedent's life or for any period not
Definitions
second power is considered as created
ascertainable without reference to the
at the time of the exercise of the first.
Annuity. An annuity consists of one or
decedent's death or for any period that
Attachments
more payments extending over any
did not in fact end before the decedent's
period of time. The payments may be
death; and
If the decedent ever possessed a power
equal or unequal, conditional or
The contract or agreement is not a
of appointment, attach a certified or
unconditional, periodic or sporadic.
policy of insurance on the life of the
verified copy of the instrument granting
decedent.
the power and a certified or verified
Examples. The following are
copy of any instrument by which the
examples of contracts (but not
Note. A private annuity is an annuity
power was exercised or released. You
necessarily the only forms of contracts)
issued by a party not engaged in the
must file these copies even if you
for annuities that must be included in the
business of writing annuity contracts,
contend that the power was not a
gross estate:
typically a junior generation family
general power of appointment, and that
1. A contract under which the
member or a family trust.
the property is not otherwise includible
decedent immediately before death was
in the gross estate.
An annuity contract that provides
receiving or was entitled to receive, for
periodic payments to a person for life
the duration of life, an annuity with
Schedule I—Annuities
and ceases at the person's death is not
payments to continue after death to a
includible in the gross estate. Social
designated beneficiary, if surviving the
If any assets to which the
security benefits are not includible in the
decedent.
special rule of Regulations
!
gross estate even if the surviving
section 20.2010-2(a)(7)(ii)
2. A contract under which the
CAUTION
spouse receives benefits.
applies are reported on this schedule,
decedent immediately before death was
do not enter any value in the last three
receiving or was entitled to receive,
An annuity or other payment that is
columns. See instructions for line 10 of
together with another person, an annuity
not includible in the decedent's or the
Part 5–Recapitulation for information on
payable to the decedent and the other
survivor's gross estate as an annuity
how to estimate and report the value of
person for their joint lives, with
may still be includible under some other
these assets.
payments to continue to the survivor
applicable provision of the law. For
following the death of either.
Complete Schedule l and file it with
example, see Powers of Appointment
3. A contract or agreement entered
the return if you answered “Yes,” to
and the instructions for
into by the decedent and employer
question 16 of Part 4—General
Schedule G—Transfers During
Information.
under which the decedent immediately
Decedent's Life, earlier. See also
before death and following retirement
Regulations section 20.2039-1(e).
Enter on Schedule I every annuity
was receiving, or was entitled to
that meets all of the conditions under
If the decedent retired before
receive, an annuity payable to the
General, later, and every annuity
January 1, 1985, see Annuities Under
decedent for life. After the decedent's
described in paragraphs (a) through (h)
Approved Plans, later, for rules that
death, if survived by a designated
of Annuities Under Approved Plans,
allow the exclusion of part or all of
beneficiary, the annuity was payable to
certain annuities.
the beneficiary with payments either
-30-
Part Instructions
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