## Facts

- Thomas R. Sowell died in 1967 and created a testamentary trust for his surviving spouse, Ida Maude Sowell, naming her as trustee.
- The trust required that net income be paid to Ida for life, with the remainder to pass at her death to Thomas’s sons and daughter-in-law.
- The trust authorized Ida, as trustee, to invade principal only “in case of emergency or illness.”
- After Ida’s death, the Commissioner determined the trust corpus was includable in her gross estate under I.R.C. § 2041 on the theory that she held a general power of appointment.
- The Estate contended the invasion power was constrained by an ascertainable standard tied to Ida’s health and support, placing it within the statutory exception to general powers of appointment.
- The Tax Court granted summary judgment to the Commissioner, treating the power as general; the Estate appealed.

## Issues

1. Whether a trustee-beneficiary’s power to invade trust corpus “in case of emergency or illness” is a general power of appointment under I.R.C. § 2041, causing inclusion of the trust corpus in the holder’s gross estate.
2. Whether the phrase “emergency or illness” constitutes an ascertainable standard relating to the holder’s health, education, support, or maintenance under § 2041(b)(1)(A).

## Decision

- The Tenth Circuit reversed the Tax Court.
- The court held that the power to invade principal “in case of emergency or illness” was limited by an ascertainable standard related to Ida’s health and support.
- Because the power fell within § 2041(b)(1)(A)’s exception, it was not a general power of appointment.
- The trust corpus therefore was not includable in Ida’s gross estate under § 2041.

## Legal Principles

- Under I.R.C. § 2041, property is included in a decedent’s gross estate if the decedent held a general power of appointment over it at death.
- A power to consume, invade, or appropriate property for the decedent’s benefit is not a general power if it is limited by an ascertainable standard relating to the decedent’s health, education, support, or maintenance. I.R.C. § 2041(b)(1)(A).
- Determining whether an invasion clause fits § 2041(b)(1)(A) requires: (1) a standard sufficiently definite to be interpreted and enforced by a court, and (2) a standard reasonably measurable in terms of the decedent’s needs for health, support, or maintenance.
- When trust language ties “emergency” to “illness,” it may be construed as addressing objectively verifiable needs rather than granting unrestricted access to principal.

## Conclusion

The court held that an invasion power limited to “emergency or illness” is enforceably definite and connected to the beneficiary’s health and support, so it is not a general power of appointment under § 2041 and does not trigger estate-tax inclusion of the trust corpus.


Estate of Sowell v. Commissioner, 708 F.2d 1564 (10th Cir. 1983)