Taxation of Estates and Gifts

Substantial Adverse Interest

A substantial adverse interest is one where one has a not insignificant proportion of the power "after the decedent's death and may exercise it at that time in favor of himself, his estate, his creditors, or the creditors of his estate." 26 CFR § 20.2041-3(c)(2).

If one's interest does not pass on death to his fellow joint donees, they do not have substantial adverse interests. 26 CFR § 20.2041-3(c)(3).