*117 Under section 2046, a qualified disclaimer meeting the requirements of section 2518 produces the result that the disclaimant is treated as having never received the disclaimed interest in property for Federal estate tax purposes. Instead, section 25.2518-1(b), Gift Tax Regs., provides that the interest is considered as passing directly to the persons entitled to receive the property as a result of the disclaimer. Petitioner argues that Nancy gave oral authority to Mr. Re to execute a qualified disclaimer on behalf of her father's estate and that, as a result, the probatable assets of the Estate of Marjorie Allen were considered as passing directly to Nancy and Janice, instead of to the Estate of Robert Allen. We agree.
Under section 2518(b), a qualified disclaimer is defined as an "irrevocable and unqualified refusal by a person to accept an interest in property" that meets four requirements. *118 disclaimer. Therefore, the only issue for decision is whether Mr. Re was properly authorized to execute a qualified disclaimer.
Section 2518 and the regulations thereunder do not address the issue of who may disclaim an interest in an estate for purposes of Federal estate tax law. Section 25.2518-2(b), Gift Tax Regs., simply requires that the disclaimer be signed by "the disclaimant or by the disclaimant's legal representative," without specifying who fits within the meaning of "disclaimant" or "legal representative." Commissioner v. Estate of Bosch,387 U.S. 456">387 U.S. 456, 465 (1967); Rolin v. Commissioner,588 F.2d 368">588 F.2d 368, 369 (2d Cir. 1978), affg. 68 T.C. 919">68 T.C. 919 (1977); Estate of Dancy v. Commissioner,89 T.C. 550">89 T.C. 550, 557 (1987), on appeal (4th Cir., June 24, 1988).
Under section 112.635 of the Oregon Revised Statutes, Estate of Hoenig v. Commissioner,66 T.C. 471">66 T.C. 471, 478 (1976). Respondent, however, argues that Mr. Re was not independently authorized by state statute to execute the disclaimer and that he was not otherwise authorized to execute the disclaimer because Nancy did not give him written authorization to do so. We find, however, that under Oregon law Nancy could properly orally authorize Mr. Re to act as her agent by executing the qualified disclaimer on behalf of her father's estate.
Oregon case law embraces the fundamental tenet of the common law of agency which holds that an agent may be appointed in writing or by word of mouth, except when a statute requires written authorization. Mechem, A Treatise on the Law of Agency sec. 211 at 154, secs. 221 and 222 at 164 (2d ed. 1982); 2A C.J.S., Principal and Agent, secs. 43 and 44 (1973); 1 Restatement, Agency 2d, sec. 26 (1958). As stated in Gaha v. Dodge,53 Or. App. 471">53 Or.App. 471, 632 P.2d 483">632 P.2d 483, 486 (1981), "In order to establish an agency relationship, there need not be a formal contract, but the person for whom the service is performed must consent to the existence of the relationship and must have the right of control." In Oregon, a principal may confer express authority on an agent in express terms, whether written or oral. See Wiggins v. Barrett & Associates, Inc.,295 Or. 679">295 Or. 679, 669 P.2d 1132">669 P.2d 1132, 1138 (1983); Johnson v. Tesky,57 Or. App. 133">57 Or.App. 133, 643 P.2d 1344">643 P.2d 1344, 1348 (1982) (implicit in the findings of these cases is the principle that an agency may be created by word of mouth).The nature and extent of an agent's authority is a question of fact that may be proved by direct or circumstantial evidence. Briggs v. Morgan,262 Or. 17">262 Or. 17, 496 P.2d 17">496 P.2d 17, 20 (1972); Start v. Shell Oil Co.,202 Or. 99">202 Or. 99, 260 P.2d 468">260 P.2d 468, 471 (1953).
The uncontroverted evidence in the record establishes that Nancy, empowered by the Oregon statute to execute a disclaimer, expressly authorized Mr. Re to execute that disclaimer on behalf of the estate. The express authorization occurred during Nancy's telephone call to Mr. Re on December 15, 1983. This finding is buttressed by Nancy's action of filing her mother's estate tax return on December 16, 1983, and the inventory of her father's estate on January 16, 1984, to reflect the effect of the disclaimer. *123 We also find that Nancy gave Mr. Re express authority to accept delivery of the disclaimer on her behalf as personal representative of her mother's estate. Because we find that Nancy expressly authorized Mr. Re to execute and receive the disclaimer on her behalf as the authorized personal representative of both her parents' estates, we refuse to split hairs as respondent does in arguing that Mr. Re incorrectly signed the disclaimer as the attorney for the estate, rather than as the attorney for the personal representative. The record reveals that Mr. Re acted on Nancy's behalf and the title which he used on the disclaimer's form does not affect the substance of the express authorization which he had. Cf. Wilson v. Culbertson,41 Or. App. 475">41 Or.App. 475, 599 P.2d 1163">599 P.2d 1163, 1164 (1979).
We reject respondent's attempt to support his position that Mr. Re should have had written authorization by analogizing the instant situation to those involving: (1) the requirement of the statute of frauds that an agent have written authority to execute an agreement concerning real estate transactions, Or. Rev. Stat. sec. 41.580(6) (1987), and (2) the requirement that a written power of attorney be attached to a tax return signed by an agent. Secs. 1.6061-1(a) and 1.6012-1(a)(5), Income Tax Regs. It does not follow that because written authorization of an agent specifically is required by statute and regulation in these situations, it should be required in the situation involved herein. The hard fact is that the law of agency does not generally require written authorization, see page 9, supra, and there is no statute or regulation, state or Federal, which requires it with respect to the execution of a disclaimer. section 2518. Cf. CSX Corp. v. Commissioner,89 T.C. 134">89 T.C. 134, 147 (1987); Bedell Trust v. Commissioner,86 T.C. 1207">86 T.C. 1207, 1221 n.9 (1986).
We also reject respondent's attempt to find support for his position from the general rule which precludes a fiduciary (in this case Nancy, as personal representative) from delegating discretionary authority. See 33 C.J.S., Executors and Administrators, sec. 146 (1973). Mr. Re's authorization from Nancy did not involve the exercise of discretion on his part; rather it was simply a specific authorization to take a specific action on Nancy's behalf. See Meck v. Behrens,141 Wash. 676">141 Wash. 676, 252 P. 91">252 P. 91, 94 (1927).
We hold that Mr. Re was authorized to disclaim and did disclaim the interest of the Estate of Robert Lewis Allen in property devised to Mr. Allen under the will of Marjorie S. Allen. Decision will be entered under Rule 155.
Document Info
Docket Number： Docket No. 16708-87.
Citation Numbers： 56 T.C.M. 1494, 1989 Tax Ct. Memo LEXIS 111, 1989 T.C. Memo. 111
Filed Date： 3/21/1989
Precedential Status： Non-Precedential
Modified Date： 11/20/2020
Authorities (7)
Estate of Genevieve Rolin, Deceased, Haydee Rolin and ... , 588 F.2d 368 ( 1978 )
Hiransomboon v. Unigard Mutual Insurance , 46 Or. App. 493 ( 1980 )
Wilson v. Culbertson , 41 Or. App. 475 ( 1979 )
Johnson v. Tesky , 57 Or. App. 133 ( 1982 )
Briggs v. Morgan , 262 Or. 17 ( 1972 )
Alldrin v. Lucas , 260 Or. 373 ( 1971 )
Gaha v. Taylor-Johnson Dodge, Inc. , 53 Or. App. 471 ( 1981 )
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