Such powers were vested in the petitioner only in her capacity as one of the trustees and were not reserved by her as grantor. The powers of management conferred on the trustees were broad and extensive and were necessarily made so in the interests of efficient management.No restrictions were ever placed on the use of the income by any of the beneficiaries other than that of Theodore in connection with the repayment of the loan secured by him from the trust. The trustees never applied or were requested to apply any of the income or principal of the trust to the maintenance, benefit, and welfare of any of the beneficiaries.Once rights are obtained by local law, whatever they may be called, these rights are subject to the federal definition of taxability.
Whether that event may or may not occur depends upon the interpretation placed upon the terms of the instrument by state law.
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