Taxation of Estates and Gifts

Life Estate with Power of Appointment in Surviving Spouse

LEPOA is an exception to the terminable interest rule for life estates laid out in 26 U.S.C. § 2056(b)(5). It has five requirements:

  1. The surviving spouse must be entitled to all the income from the interest for life.
  2. The income must be payable at least annually.
  3. The surviving spouse must have the power to appoint the entire interest to herself or her estate.
  4. The surviving spouse's power to appoint must be exercisable alone and in all events.
  5. Nobody has a power to appoint any part of the property to someone other than the surviving spouse.