                         T.C. Memo. 2000-368



                       UNITED STATES TAX COURT



      ESTATE OF FLOY M. CHRISTENSEN, DECEASED, CARL STEWART
       CHRISTENSEN, PERSONAL REPRESENTATIVE, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10793-99.                     Filed December 6, 2000.


     George W. Akers, for petitioner.

     Julie L. Payne, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    Respondent determined a deficiency of

$108,633 in Federal estate tax (estate tax) with respect to the

estate (estate) of Floy M. Christensen (decedent).

     The issues for decision are:

     (1)   Is the aggregate amount of funds represented by certain

checks includible in decedent’s gross estate?      We hold that it
                                - 2 -

is.

      (2)   Is certain property with respect to which decedent had

a power of appointment at the time of her death includible in

decedent’s gross estate?    We hold that it is.

                             Background

      This case was submitted fully stipulated.   The facts that

have been stipulated are so found.

      At the time the petition was filed, Carl Stewart Christensen

(Mr. Christensen), decedent’s son and the personal representative

of the estate, resided in Seattle, Washington.

      On January 10, 1996, Floy M. Christensen, a resident of

Kirkland, Washington, died testate at the age of 102.    On Febru-

ary 25, 1982, Carl A. Christensen, decedent’s spouse to whom she

had been married for approximately 50 years, died testate.

Pursuant to Carl A. Christensen’s will, which he executed on

August 26, 1980, a trust (trust) was created for the benefit of,

inter alia, decedent.    Pursuant to the terms of Carl A.

Christensen’s will creating that trust, decedent had the power to

withdraw (power to withdraw) from the trust annually, by written

request to the trustee, a share of the trust’s principal in an

amount not exceeding the greater of $5,000 or 5 percent of the

value of such principal.    Carl A. Christensen’s will creating the

trust contained no limitations or directions on the exercise of

decedent’s power to withdraw.    When decedent died, she had not
                               - 3 -

exercised her power to withdraw for 1996.   As of the date of

decedent’s death, the value of the trust equaled $1,535,950.58.

     On August 15, 1984, decedent executed a durable power of

attorney (decedent’s power of attorney) by which she appointed

Mr. Christensen and Louise M. Hastie (Ms. Hastie), her daughter,

as her attorneys in fact.   (For convenience, we shall sometimes

refer to Mr. Christensen and Ms. Hastie as decedent’s children.)

Decedent’s power of attorney provided in pertinent part:

          (1) Powers. The Attorneys in Fact, as fiducia-
     ries, shall have all the powers of absolute ownership
     and control of all assets and liabilities of the Prin-
     cipal, whether located within or without the State of
     Washington, the same as are possessed by the Principal,
     including, but not limited to, the power (i) to convey,
     transfer, encumber or otherwise deal in any way in
     connection with real property, securities and bank
     accounts owned by the Principal, and (ii) to do all
     acts granted trustees by the Washington Trust Act of
     1959 and any amendments thereto (which powers are
     incorporated herein by this reference).

          (2) Effectiveness and Duration. This Power of
     Attorney shall become effective immediately and shall
     not be affected by the disability of the Principal.

Decedent’s power of attorney did not specifically grant dece-

dent’s children the power to transfer decedent’s property by

gift.

     On September 30, 1994, decedent moved into Cascade Vista

Convalescent Center (Cascade Vista) located in Redmond, Washing-

ton, where she remained until she died.   Upon her admission to

Cascade Vista, decedent was diagnosed with various ailments,

including progressive dementia.   From at least September 30,
                                  - 4 -

1994, to the date of her death, decedent exhibited severely

impaired cognitive skills, including poor short-term and long-

term memory.

     Since the mid-1980's until the date of her death, decedent

maintained a joint bank account at Seafirst Bank (Seafirst joint

account) with Mr. Christensen and Ms. Hastie.         At all times, all

of the funds deposited in the Seafirst joint account belonged to

decedent.

     During November 1995, approximately two months prior to

decedent’s death, Mr. Christensen or Ms. Hastie signed the

following checks totaling $105,000 (November 1995 checks) drawn

on the Seafirst joint account that were payable to the individu-

als indicated:

   Date                                                 Relationship of
 of Check   Check No.   Amount            Payee        Payee to Decedent
  11/5/95      1818     $10,000       Dee Hastie        Wife of grandson
  11/5/95      1819      5,000       Steve Hewitt       Husband of great
                                                          granddaughter
  11/5/95      1820      5,000      Heather Hewitt     Great granddaughter
  11/5/95      1821      5,000      Felicia Johnson    Great great grand-
                                                            daughter
  11/5/95      1822      5,000       Ann Johnson       Great granddaughter
  11/5/95      1823     10,000       John Hanawalt     Husband of grand-
                                                           daughter
  11/5/95      1824      5,000      Calum Hanawalt       Great grandson
  11/5/95      1825      5,000       Oona Hanawalt     Great granddaughter
  11/6/95      1351      5,000       Ray Bracelin        Great grandson
  11/7/95      1353     10,000       M.D. Lamont       Significant other
                                                       of granddaughter
                                   - 5 -

  11/7/95      1354      10,000      Robert Malinof      Significant other
                                                         of granddaughter
  11/8/95      1826      10,000        Mel Hearn         Husband of grand-
                                                             daughter
  11/8/95      1827       5,000       Colin Hearn          Great grandson
  11/8/95      1828       5,000       Clare Hearn        Great granddaughter
  11/8/95      1829       5,000       Ariel Nilsen       Great granddaughter
 11/21/95      1357       5,000      Sander Bracelin       Great grandson

     In early January 1996, prior to decedent’s death on January

10, 1996, Mr. Christensen or Ms. Hastie signed the following

checks totaling $100,000 (January 1996 checks) drawn on the

Seafirst joint account that were payable to the individuals

indicated:

   Date                                                    Relationship of
 of Check    Check No.   Amount            Payee          Payee to Decedent
  1/2/96       1360      $10,000      Louise Hastie            Daughter
  1/2/96       1361      10,000        Colin Hastie            Grandson
  1/2/96       1830      10,000      C.S. Christensen            Son
  1/2/96       1831      10,000     Helen Christensen         Son’s wife
  1/8/96       1833      10,000        Lisa Hastie          Granddaughter
  1/8/96       1834      10,000        Chris Hearn          Granddaughter
  1/8/96       1835      10,000       Lael Hanawalt         Granddaughter
  1/9/96       1363      10,000     Sandra Christensen      Granddaughter
  1/9/96       1364      10,000     Karen Christensen       Granddaughter
  1/9/96       1832      10,000        Toby Hastie             Grandson

Check Nos. 1834 and 1835 did not clear Seafirst Bank until

January 11, 1996, and check Nos. 1363 and 1364 did not clear

Seafirst Bank until January 12, 1996.

     In addition to the November 1995 checks and the January 1996
                                - 6 -

checks, other checks were written on the Seafirst joint account,

including checks totaling $56,000, $15,000, and $41,700 that were

signed around Christmas 1984, 1985, and 1989, respectively, by

one of the joint account holders whose identity is not disclosed

by the record.    Moreover, during 1990 through February 11, 1995,

one of the joint account holders of the Seafirst joint account

whose identity is not disclosed by the record signed, inter alia,

the following checks drawn on that account:

      Date                                       Relationship of
    of Check     Amount          Payee          Payee to Decedent

    7/27/90      $10,000         Colin1

    7/27/90      10,000            ?2

    7/27/90      10,000            ?

    7/27/90      10,000            ?

    11/9/90      10,000       Toby Hastie           Grandson

    11/9/90      10,000       Chris Hearn        Granddaughter

    11/9/90      10,000      Lael Hanawalt       Granddaughter

    11/9/90      10,000       Lisa Hastie        Granddaughter

    4/11/91      10,000            ?

    4/11/91      10,000            ?

    4/12/91      10,000          Colin

    4/12/91      10,000            ?

    11/17/91     10,000        Dee Hastie       Wife of grandson

    11/17/91     10,000       Chris Hearn        Granddaughter

    11/17/91     10,000      Lael Hanawalt       Granddaughter

    11/17/91     10,000       Lisa Hastie        Granddaughter

    11/21/91     10,000    Sandra Christensen    Granddaughter
                        - 7 -

12/5/91    10,000           ?

1/8/92     10,000           ?

1/8/92     10,000         Colin

1/9/92     10,000           ?

1/9/92     10,000           ?

12/2/92    10,000     Lael Hanawalt        Granddaughter

12/2/92    10,000           ?

12/2/92    10,000      Lisa Hastie         Granddaughter

12/2/92    10,000      Chris Hearn         Granddaughter

12/6/92    10,000   Sandra Christensen     Granddaughter

12/6/92    10,000           ?

1/12/92    10,000           ?

1/12/92    10,000           ?

1/13/93    10,000           ?

1/13/93    10,000         Colin

10/13/93   10,000           ?

10/13/93   10,000   Sandra Christensen     Granddaughter

10/13/93   7,000      Ray Bracelin         Great grandson

10/13/93   7,000     Sander Bracelin       Great grandson

10/13/93   10,000      Toby Hastie            Grandson

10/13/93   7,000     Heather Hewitt      Great granddaughter

10/13/93   7,000       Ann Johnson       Great granddaughter

10/13/93   7,000     Felicia Johnson     Great great grand-
                                              daughter

10/13/93   10,000     Lael Hanawalt        Granddaughter

10/13/93   7,000      Ariel Nilsen       Great granddaughter

10/13/93   7,000      Oona Hanawalt      Great granddaughter

10/13/93   7,000     Calum Hanawalt        Great grandson
                                    - 8 -

     10/13/93      10,000          Chris Hearn           Granddaughter

     10/13/93       7,000          Clare Hearn        Great granddaughter

     10/13/93      10,000          Lisa Hastie           Granddaughter

      1/3/94       10,000               ?

      1/3/94       10,000               ?

      1/3/94       10,000               ?

      1/3/94       10,000               ?

     1/21/94       10,000               ?

     1/21/94       10,000               ?

     1/24/94       10,000          Chris Hearn           Granddaughter

     1/24/94       10,000         Lael Hanawalt          Granddaughter

     1/24/94       10,000          Dee Hastie          Wife of grandson

     1/24/94       10,000          Lisa Hastie           Granddaughter

      1/2/95       10,000               ?

      1/2/95       10,000               ?

      1/3/95       10,000               ?

      1/3/95       10,000             Colin

     2/10/95       10,000         Lael Hanawalt          Granddaughter

     2/10/95       10,000          Chris Hearn           Granddaughter

     2/10/95       10,000               ?

     2/10/95       10,000          Lisa Hastie           Granddaughter

     2/11/95       10,000               ?

     2/11/95       10,000               ?
      1
        Where the payee is shown in the chart as Colin, we have not been able
to determine from the record before us whether the payee was Colin Hastie or
Colin Hearn.
      2
        Where there are question marks under the column headed “Payee”, we have
not been able to determine from the record before us the names of the payees
of the checks shown in the chart.

      Mr. Christensen, as the personal representative of the
                               - 9 -

estate, filed Form 706, United States Estate (and Generation-

Skipping Transfer) Tax Return (estate tax return), which showed

estate tax due of $14,573.   The estate tax return reported that

decedent’s total gross estate equaled $721,834.   Included in

decedent’s total gross estate reported in the estate tax return

was the value of the Seafirst joint account as of the date of

decedent’s death, which the personal representative reported in

Schedule E, Jointly Owned Property, of that return (Schedule E)

as $64,676.1   The value of the Seafirst joint account reported in

Schedule E and included in decedent’s total gross estate did not

include the aggregate amount of funds represented by the November

1995 checks and the January 1996 checks (i.e., $205,000).   The

estate tax return did not include as part of decedent’s total

gross estate any amount with respect to decedent’s power to

withdraw.

     Respondent issued a notice of deficiency (notice) with

respect to the estate tax return.   In the notice, respondent

determined that the aggregate amount of funds represented by the

November 1995 checks and the January 1996 checks should have been

reported in Schedule E.   Consequently, respondent increased

decedent’s total gross estate and taxable estate by that amount

(i.e., $205,000).   Respondent also determined in the notice that



     1
      The value of the Seafirst joint account reported in Sched-
ule E included $140 of interest that had accrued on that account
through the date of decedent’s death.
                              - 10 -

decedent’s power to withdraw, which had not lapsed as of the date

of decedent’s death, was a general power of appointment that

should have been reported in Schedule H, Powers of Appointment,

of the estate tax return (Schedule H).     Consequently, respondent

increased decedent’s total gross estate and taxable estate by

$76,797, which is 5 percent times the value ($1,535,950.58) of

the trust as of the date of decedent’s death.

                            Discussion

     The estate bears the burden of proving that the determina-

tions in the notice are erroneous.     See Rule 142(a);2 Welch v.

Helvering, 290 U.S. 111, 115 (1933).     That this case was submit-

ted fully stipulated does not change that burden or the effect of

a failure of proof.   See Rule 122(b); Borchers v. Commissioner,

95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir. 1991).

November 1995 Checks and January 1996 Checks

     The parties’ dispute with respect to the November 1995

checks and the January 1996 checks is whether the transfers of

funds represented by those checks constitute nontaxable gifts

made by decedent.   If they do not, the parties agree that the

amounts of funds withdrawn by those checks from the Seafirst

joint account are includible in decedent’s gross estate.



     2
      All Rule references are to the Tax Court Rules of Practice
and Procedure. Unless otherwise indicated, all section refer-
ences are to the Internal Revenue Code in effect on the date of
decedent’s death.
                               - 11 -

       According to the estate, the transfers of funds represented

by the November 1995 checks and the January 1996 checks consti-

tute gifts made by decedent because those checks were “authorized

and proper disbursements” under the laws of the State of Washing-

ton.    In support of its position that the checks in question were

authorized and proper disbursements under the laws of the State

of Washington, the estate asserts:

            Washington State law, RCW 30.22.050, provides for
       various types of bank accounts, one of which is a joint
       account. RCW 30.22.090(2) provides that funds in a
       joint account belong to the person depositing the
       funds. Finally, RCW 30.22.040(11) and (14) and RCW
       30.22.140 provide that any individual who has the
       current right to payment of funds pursuant to the
       account agreement may issue checks on the account which
       the financial institution is authorized to honor. * * *

       Respondent counters the estate’s position as follows:

            Respondent agrees with Petitioner that Floy
       Christensen’s children were authorized by statute to
       write checks on the joint account. Petitioner accu-
       rately states that Wash. Rev. Code § 30.22.050 provides
       for the creation of joint bank accounts and Wash. Rev.
       Code § 30.22.090 provides that funds in a joint account
       belong to the person depositing the funds. Petitioner
       also argues under Wash. Rev. Code § 30.22.140 that any
       individual who has the current right to payment of
       funds pursuant to the account agreement may issue
       checks on the account which the financial institution
       is authorized to honor. Petitioner misconstrues this
       statute.

            Wash. Rev. Code § 30.22.140 is a provision for the
       protection of financial institutions when they pay a
       depositor named on a joint account who may not be the
       actual owner of the funds paid. Clearly, a depositor
       named on a joint account may withdraw all of the funds
       in an account. This ability does not, however, trans-
       late into ownership of the funds that are held in the
       joint account. Rather, Wash. Rev. Code § 30.22.090
                              - 12 -

     sets forth the joint account holders’ respective owner-
     ship rights to the funds deposited in the account.
     Consistent with this statute, and as stipulated in this
     case, Floy Christensen was at all times the owner of
     all of the funds in the joint account.

          Wash. Rev. Code § 30.22.130 preserves Floy
     Christensen’s ownership rights to the funds in the
     joint account, notwithstanding that a financial insti-
     tution properly made payment of the funds to her chil-
     dren as joint account holders. * * *

     We find the estate’s reliance on certain statutory provi-

sions of the laws of the State of Washington to support its

position that the transfers of funds represented by the November

1995 checks and the January 1996 checks constitute gifts made by

decedent to be misplaced.   None of those provisions, which are

part of the Financial Institution Individual Account Deposit Act

(Act), see Wash. Rev. Code Ann. ch. 30.22 (West 1986),3 grants

authority to a person named on a joint bank account who does not

own the funds in such an account to make a gift of all or a

portion of those funds on behalf of the actual owner of those

funds.

     As the estate accurately indicates, Wash. Rev. Code Ann.

sec. 30.22.050 (West 1986) provides for the creation of joint

bank accounts, and Wash. Rev. Code Ann. sec. 30.22.090(2) (West

1986) provides that funds on deposit in a joint account belong to


     3
      All references to the Revised Code of Washington Annotated
are to that Code in effect on the date of decedent’s death and on
the various dates on which the November 1995 checks and the
January 1996 checks were written and subsequently paid by
Seafirst Bank.
                             - 13 -

the depositors in proportion to the net funds owned by each

depositor (unless the contract of deposit provides otherwise or

there is clear and convincing evidence of a contrary intent at

the time the account was created).    In the instant case, the

parties stipulated that at all times decedent owned all of the

funds deposited in the Seafirst joint account.    The estate also

accurately indicates that Wash. Rev. Code Ann. sec. 30.22.140

(West 1986) (RCWA 30.22.140) permits a financial institution to

make payments of funds on deposit in an account having two or

more depositors to or for any one or more of the depositors named

on the account without regard to the actual ownership of the

funds by or between the depositors.

     Moreover, Wash. Rev. Code Ann. sec. 30.22.120 (West 1986)

(RCWA 30.22.120) permits a financial institution, in making

payments of funds deposited in an account, to rely conclusively

and entirely upon the form of the account and the terms of the

contract of deposit at the time the payments are made.    RCWA

30.22.120 does not require a financial institution to inquire as

to (1) either the source or the ownership of any funds received

for deposit to an account or (2) the proposed application of any

payments made from an account.   Unless a financial institution

has actual knowledge of the existence of a dispute between

depositors, beneficiaries, or other persons claiming an interest

in funds deposited in an account, pursuant to RCWA 30.22.120, a
                               - 14 -

payment that is made in accordance with various sections of the

Act by a financial institution from an account at the request of

any depositor to the account and/or the agent of any depositor to

the account is to constitute a complete release and discharge of

the financial institution from all claims for the amount so paid

regardless of whether or not the payment is consistent with the

actual ownership of the funds deposited in an account by a

depositor and/or the actual ownership of the funds as between

depositors and/or their heirs, successors, personal representa-

tives, and assigns.   RCWA 30.22.120 thus permits a financial

institution to assume that each of the persons listed on a joint

account has authority over all of the funds on deposit in such an

account unless the financial institution specifically knows of a

dispute regarding the funds.

     Neither RCWA 30.22.120 nor RCWA 30.22.140 on which the

estate relies authorizes a joint account holder who is not the

actual owner of the funds in a joint account to withdraw funds

from the account.   If funds on deposit in a joint account are

paid to or for a joint account holder who does not own the funds

and who is not authorized by the owner of the funds to withdraw

such funds for that purpose, the proper remedy is for the actual

owner to sue the joint account holder.   See Kalk v. Security Pac.

Bank Wash. N.A., 866 P.2d 1276, 1278 (Wash. Ct. App. 1994), revd.

on other grounds 894 P.2d 559 (Wash. 1995).   Such a right is
                                - 15 -

preserved by Wash. Rev. Code Ann. sec. 30.22.130 (West 1986)

(RCWA 30.22.130).   See id.

     RCWA 30.22.130 provides:

     30.22.130.   Rights as between individuals preserved

          The protection accorded to financial institutions
     under * * * [the Act] shall have no bearing on the
     actual rights of ownership to deposited funds by a
     depositor, and/or between depositors * * * and their
     heirs, successors, personal representatives, and as-
     signs.

     The protections accorded to financial institutions by RCWA

30.22.120, RCWA 30.22.140, and other sections of the Act when

they make payments of funds on deposit to a person named on a

bank account were not intended to and, as RCWA 30.22.130 ex-

pressly provides, do not threaten or eviscerate the ownership

rights of depositors.     See Kalk v. Security Pac. Bank Wash. N.A.,

894 P.2d 559, 561 (Wash. 1995).    As noted by the Supreme Court of

Washington, the legislative history of the Act indicates that

RCWA 30.22.130, which preserves the ownership rights of individ-

ual depositors, is the converse of RCWA 30.22.120, which protects

financial institutions.    See Kalk v. Security Pac. Bank Wash.

N.A., supra at 561 n.4.

     Although the estate acknowledges that RCWA 30.22.130 pre-

serves certain rights of ownership to deposited funds, it con-

tends that RCWA 30.22.130 did not preserve the ownership rights

of decedent to the amounts of funds withdrawn from the Seafirst

joint account by the November 1995 checks and the January 1996
                                - 16 -

checks.   That is because, according to the estate, none of the

payees of any of those checks was a depositor referred to in RCWA

30.22.130 within the meaning of Wash. Rev. Code Ann. sec.

30.22.040(11) (West 1986) (RCWA 30.22.040(11)).   In support of

that position, the estate asserts:

     Depositors are defined in RCW 30.22.040(11) to include
     Floy Christensen, both as the owner of the funds on
     deposit and as a person authorized to sign on the joint
     account, as well as her two children as people autho-
     rized to sign on the joint account. The recipients of
     the Gift Checks, as payees of the Gift Checks, are not
     within the definition of depositor for the issues
     presented in this case.

     We reject the estate’s position.    That position misconstrues

RCWA 30.22.130 and disregards the definition of the term “deposi-

tor” in RCWA 30.22.040(11) that is to apply for purposes of RCWA

30.22.130.   RCWA 30.22.040(11) sets forth the following two

distinct definitions of the term “depositor”:

     30.22.040.   Definitions

          (11) “Depositor”, when utilized in determining the
     rights of individuals to funds in an account, means an
     individual who owns the funds. When utilized in deter-
     mining the rights of a financial institution to make or
     withhold payment, and/or to take any other action with
     regard to funds held under a contract of deposit,
     “depositor” means the individual or individuals who
     have the current right to payment of funds held under
     the contract of deposit without regard to the actual
     rights of ownership thereof by these individuals. * * *

     In order to determine which of the foregoing two definitions

of the term “depositor” applies for purposes of RCWA 30.22.130,

it is necessary to determine whether the term “depositor” is used
                              - 17 -

in RCWA 30.22.130 in order to determine the rights of individuals

to funds in an account or in order to determine the rights of a

financial institution to make or withhold payment and/or to take

any other action with regard to funds held under a contract of

deposit.   We conclude that the term “depositor” is utilized in

RCWA 30.22.130 in order to determine the rights of individuals to

funds in an account and is not utilized in that section in order

to determine the rights of a financial institution to make or

withhold payment and/or to take any other action with regard to

funds held under a contract of deposit.   We further conclude that

the definition of the term “depositor” that appears in RCWA

30.22.130 is an individual who owns the funds in an account.    See

RCWA 30.22.040(11).

     At all times, the only individual who owned the funds in the

Seafirst joint account was decedent.   RCWA 30.22.130 preserved

her ownership rights to the funds deposited in that account.

Unless decedent authorized Mr. Christensen and Ms. Hastie to make

gifts on behalf of decedent of certain funds in the Seafirst

joint account by issuing the November 1995 checks and the January

1996 checks to the payees indicated on those checks, when

Seafirst Bank paid those checks, decedent, as the owner of the

funds so paid, had the right to sue the joint account holders,

Mr. Christensen and Ms. Hastie, in order to recover those funds.

See RCWA 30.22.130; see also Kalk v. Security Pac. Bank Wash.

N.A., 866 P.2d at 1279.
                              - 18 -

     In further support of its position that RCWA 30.22.130 does

not apply to the November 1995 checks and the January 1996

checks, the estate contends that

     the term deposited funds as used in RCW 30.22.130 is
     defined in RCW 30.22.040(13) to be the funds on deposit
     with the financial institution less any withdrawals.
     Thus, Respondent’s reliance upon RCW 30.22.130 is
     inappropriate since it only preserves rights as between
     Floy Christensen and her children as to the ownership
     of the deposited funds, which by definition are those
     funds remaining in the account and would, therefore,
     exclude funds which had been withdrawn from the joint
     account by the Gift Checks.

     We reject the estate’s contention that the term “deposited

funds” in RCWA 30.22.130 does not include funds withdrawn from

the Seafirst joint account by the November 1995 checks and the

January 1996 checks.   The term “deposited funds” that appears in

RCWA 30.22.130 is not defined, as the estate asserts, in Wash.

Rev. Code Ann. sec. 30.22.040(13) (West 1986) (RCWA

30.22.040(13)).   Instead, RCWA 30.22.040(13) defines the terms

“‘Depositor’s funds’ or ‘funds of a depositor’”.

     Although not defined in the Act, we conclude that the term

“deposited funds” that appears in RCWA 30.22.130 is not suscepti-

ble to more than one reasonable interpretation.    See State of

Wash. v. Azpitarte, 995 P.2d 31, 33 (Wash. 2000).     The only

reasonable interpretation of the term “deposited funds” in RCWA

30.22.130 is funds on deposit with (i.e., placed in) a financial
                                - 19 -

institution.4

     We conclude that the protections accorded to Seafirst Bank

under the Act with respect to the withdrawals represented by the

November 1995 checks and the January 1996 checks that were signed

by either Mr. Christensen or Ms. Hastie as a joint account holder

of the Seafirst joint account had no bearing on the actual rights


     4
      Assuming arguendo that we were to have concluded that the
meaning of the term “deposited funds” in Wash. Rev. Code Ann.
sec. 30.22.130 (West 1986) (RCWA 30.22.130) is the same as the
meaning of the terms “‘Depositor’s funds’ or ‘funds of a deposi-
tor’” in Wash. Rev. Code Ann. sec. 30.22.040(13) (West 1986)
(RCWA 30.22.040(13)), we nonetheless reject the position of the
estate that RCWA 30.22.130 “preserves rights as between Floy
Christensen and her children as to the ownership of the deposited
funds, which by definition are those funds remaining in the
[Seafirst joint] account and would * * * exclude funds which had
been withdrawn from the joint account by the Gift Checks”. RCWA
30.22.040(13) defines the terms “‘Depositor’s funds’ or ‘funds of
a depositor’” as follows:

     30.22.040.   Definitions

          (13) “Depositor’s funds” or “funds of a depositor”
     means the amount of all deposits belonging to or made
     for the benefit of a depositor, less all withdrawals of
     the funds by the depositor or by others for the deposi-
     tor’s benefit, plus the depositor’s prorated share of
     any interest or dividends included in the current
     balance of the account and any proceeds of deposit life
     insurance added to the account by reason of the death
     of a depositor.

Contrary to the estate’s contention, the definition of the terms
“‘Depositor’s funds’ or ‘funds of a depositor’” does not exclude
all funds that would have been withdrawn from an account in a
financial institution. The definition of those terms excludes
only those withdrawals “by the depositor or by others for the
depositor’s benefit”. RCWA 30.22.040(13). None of the November
1995 checks and the January 1996 checks represented a withdrawal
of decedent’s funds in the Seafirst joint account “by the deposi-
tor [decedent] or by others for the depositor’s [decedent’s]
benefit”. RCWA 30.22.040(13).
                                 - 20 -

of ownership by decedent to the deposited funds in that joint

account.   See RCWA 30.22.130.

     Unless decedent granted Mr. Christensen and Ms. Hastie the

authority to make gifts on her behalf of the funds withdrawn from

the Seafirst joint account by the November 1995 checks and the

January 1996 checks, both Mr. Christensen and Ms. Hastie had an

obligation to account to decedent for the funds withdrawn by the

respective checks that they signed, and decedent could have sued

both of them to recover those funds.      See RCWA 30.22.130; see

also Kalk v. Security Pac. Bank Wash. N.A., 866 P.2d at 1279.        On

the record before us, we find that the estate has failed to show

that decedent authorized either Mr. Christensen or Ms. Hastie to

make gifts on her behalf of the funds in the Seafirst joint

account that were withdrawn by the November 1995 checks and the

January 1996 checks.   Indeed, the estate does not even suggest

that any such authority existed outside the purported authority

that it claims was granted to them as joint account holders of

the Seafirst joint account by certain sections of the Act.      In

this connection, the estate expressly disavows relying on the

power of attorney that decedent signed on August 15, 1984, in

order to establish that decedent authorized Mr. Christensen and

Ms. Hastie to make gifts on her behalf.      We conclude that the

estate acknowledges that that power of attorney did not authorize

Mr. Christensen and Ms. Hastie to make gifts on behalf of dece-
                             - 21 -

dent.5

     In further support of its position that the transfers of

funds represented by the November 1995 checks and the January

1996 checks constitute nontaxable gifts made by decedent, the

estate argues:

          Regulation § 25.2511-1(g)(1) makes it abundantly
     clear that Floy Christensen did not have to possess
     donative intent at the time of the Gift Checks to have
     made a gift. Instead, the Regulation applies an objec-
     tive facts and circumstances test. The Regulation
     eliminates any doubt as to that test in this fact
     pattern through an example found in the Regulations,
     § 25.2511-1(h)(4), which example deals with a joint
     bank account and gifts made from that account.

According to the estate, the example found in sec. 25.2511-

1(h)(4), Gift Tax Regs., “impliedly recognizes” that, regardless

of donative intent on the part of the transferor, checks properly

drawn on a joint account to others constitute gifts.   The estate

points to sec. 25.2511-1(c)(1), Gift Tax Regs., in further




     5
      We agree with the estate’s acknowledgment regarding dece-
dent’s power of attorney. Section 11.94.050(1) of the Revised
Code of Washington Annotated (West 1998) (RCWA 11.94.050(1))
provides that an attorney in fact does not have the power, unless
specifically otherwise provided in the power of attorney, to make
any gifts of property owned by the principal. Decedent’s power
of attorney authorizing Mr. Christensen and Ms. Hastie to act as
her attorneys in fact does not specifically provide that those
individuals were authorized to make gifts of property owned by
decedent. We conclude that decedent’s power of attorney did not
authorize Mr. Christensen and Ms. Hastie to make gifts on her
behalf. Where, as here, a power of attorney is silent with
respect to any authority to make gifts of the principal’s prop-
erty, the agent may not read such authority into the instrument.
See RCWA 11.94.050(1).
                               - 22 -

support of that contention.6

     Respondent counters the estate’s position as follows:

          The bare fact that Floy Christensen’s children


     6
      The estate also argues that, even if it were necessary to
show decedent’s donative intent as a prerequisite to finding that
the transfers of funds withdrawn by the November 1995 checks and
the January 1996 checks constitute nontaxable gifts,

     the only evidence bearing upon Floy Christensen’s
     intent is the declaration of Stewart Christensen * * *.
     In particular, paragraphs 4, 5 and 9 of Stewart
     Christensen’s declaration clearly state that Floy
     Christensen and her husband embarked upon a lifetime
     gifting program, which program Floy Christensen contin-
     ued upon the death of her husband. In later years,
     this gifting program was carried out by Floy
     Christensen’s son and daughter on her behalf, with her
     concurrence, and in keeping with the long-established
     gifting program.

     We are not required to, and we shall not, rely on the
uncorroborated affidavit of Mr. Christensen. There is no reli-
able evidence in the record establishing to our satisfaction
either a lifetime gifting program by decedent and her husband or
decedent’s continuation of that alleged program after the death
of her husband. Although the record does contain a handwritten
summary prepared by Mr. Christensen which summarized certain
checks written on the Seafirst joint account during 1984, 1985,
and 1989 through Jan. 9, 1996, that summary is conclusory, and we
do not find it persuasive.

     Assuming arguendo that we were to have found that a lifetime
gifting program had been carried out by decedent and her husband
and by decedent alone after her husband’s death, the record
belies the allegation of Mr. Christensen in his affidavit that
the issuance by him or Ms. Hastie of the November 1995 checks and
the January 1996 checks was done with the concurrence of dece-
dent. We have found that from at least Sept. 30, 1994, to the
date of her death, decedent suffered from progressive dementia
and exhibited severely impaired cognitive skills, including poor
short-term and long-term memory. On the record before us, we
find that the estate has failed to show that decedent possessed
the requisite mental ability to have concurred in the making of
any alleged gifts by the issuance of the November 1995 checks and
the January 1996 checks.
                             - 23 -

     could write checks on the joint account does not char-
     acterize all of those checks as gifts from Floy
     Christensen as Petitioner argues. Petitioner cites to
     Treas. Reg. §§ 25.2511-1(h)(4) and 25.2511-1(c)(1) for
     support of its argument. Treas. Reg. § 25.2511-1(c)(1)
     provides that gift tax applies to gifts indirectly
     made; it does not, however, establish the recipient of
     a particular gift. In the context of this case, Treas.
     Reg. § 25.2511-1(c)(1) does not establish that the
     payees shown on the checks in issue were the recipients
     of gifts from Floy Christensen. Additionally, Treas.
     Reg. § 25.2511-1(h)(4) provides that if Floy
     Christensen created the joint account for herself and
     her children, there is a gift to her children when they
     draw upon the account for their own benefit to the
     extent they have no obligation to account to Floy
     Christensen for the amount withdrawn.

          The regulation Petitioner relies on is inapplica-
     ble to this case. Petitioner’s argument fails because,
     under Washington State law, Floy Christensen’s children
     had an obligation to account to her for amounts they
     withdrew from the joint account. In determining
     whether a person with access to a joint account created
     by another has an obligation to account to the deposi-
     tor, courts have looked to whether the depositor had
     given up dominion and control over the deposited funds.
     See, e.g., Haneke v. United States, 548 F.2d 1138 (4th
     Cir. 1977). Floy Christensen did not give up dominion
     and control over the funds in the joint account. In
     fact, Petitioner stipulated to the fact that at all
     times all of the funds in the joint account belonged to
     Floy Christensen. Because all of the funds in the
     joint account belonged to her, she had the right to
     challenge any of the withdrawals made by her children.
     Wash. Rev. Code § 30.22.130. [Fn. ref. omitted.]

     We find the estate’s reliance on sec. 25.2511-1(c)(1),

(g)(1), and (h)(4), Gift Tax Regs., to be misplaced.   We have

concluded that Mr. Christensen and Ms. Hastie had an obligation

to account to decedent for the amounts of funds withdrawn by the

respective checks in question that they signed and that decedent

had the right to sue them for recovery of those funds, which was
                               - 24 -

preserved by RCWA 33.22.130.   On the record before us, we reject

the position of the estate that the gift tax regulations on which

the estate relies establish that the payees shown on the November

1995 checks and the January 1996 checks were the recipients of

gifts from decedent.

     Based on our examination of the entire record before us, we

find that the estate has failed to show that decedent (or a

legally appointed representative acting on behalf of decedent)

could not have revoked the transfers of funds that decedent’s

children made by the issuance of the November 1995 checks and the

January 1996 checks.7   We further find on that record that the


     7
      Respondent argues in the alternative that, assuming
arguendo the Court were to find that decedent authorized Mr.
Christensen and Ms. Hastie to make gifts of the amounts of funds
withdrawn by the November 1995 checks and the January 1996
checks, four of those checks (i.e., check Nos. 1363, 1364, 1834,
and 1835) were not cashed prior to decedent’s death. Conse-
quently, according to respondent, those four checks did not
result in completed transfers as of the date of decedent’s death
and are includible in decedent’s gross estate. We agree. See
Estate of Gagliardi v. Commissioner, 89 T.C. 1207, 1211-1213
(1987).

     A gift is not consummated until it is placed beyond the
donor’s recall. See sec. 25.2511-2(b), Gift Tax Regs. State law
determines whether decedent parted with dominion and control over
the funds in the Seafirst joint account that were withdrawn by
the November 1995 checks and the January 1996 checks. See Estate
of Dillingham v. Commissioner, 88 T.C. 1569, 1575 (1987), affd.
903 F.2d 760 (10th Cir. 1990). Under the law of the State of
Washington, where a donor uses a check to make a gift, the donor
does not immediately relinquish control over the funds repre-
sented by the checks. See Wash. Rev. Code Ann. sec. 62A.3-408
(West 1995). Delivery of the check will not perfect a monetary
gift because the donor may stop payment or withdraw all the funds
in the bank account, thereby effectively revoking the gift. See
                                                   (continued...)
                               - 25 -

estate has failed to show that the transfers of those funds

constitute nontaxable gifts.   The parties agree that if the Court

were to find that the transfers of funds represented by the

November 1995 checks and the January 1996 checks do not consti-

tute nontaxable gifts, the determination in the notice with

respect to those funds should be sustained.   Consequently, we

sustain that determination.

Decedent’s Power To Withdraw

     The estate concedes that, unless one of the exceptions in

section 2041(b)(1)(A), (B), or (C) applies to decedent’s power to

withdraw, that power constitutes a general power of appointment

as defined in section 2041(b)(1), and 5 percent of the value of

the property with respect to which decedent held that power for

1996 is includible in decedent’s gross estate.   The estate

contends, however, that the exception in section 2041(b)(1)(A)8

applies to decedent’s power to withdraw.   According to the



     7
      (...continued)
Wash. Rev. Code Ann. sec. 62A.4-403 (West 1995). Check Nos.
1363, 1364, 1834, and 1835 did not clear Seafirst Bank until
after the date of decedent’s death. As of the date of her death,
decedent had not relinquished control over the funds represented
by those four checks, and delivery of those four checks did not
perfect monetary gifts to the payees indicated on those checks.
See Wash. Rev. Code Ann. secs. 62A.3-408 and 62A.4-403 (West
1995).
     8
      Section 2041(b)(1)(A) excepts from the definition of a
general power of appointment “A power to consume, invade, or
appropriate property for the benefit of the decedent which is
limited by an ascertainable standard relating to the health,
education, support, or maintenance of the decedent”.
                                - 26 -

estate, Wash. Rev. Code Ann. sec. 11.95.100 (West 1998) (RCWA

11.95.100)9 imposed on decedent’s power to withdraw an ascertain-

able standard relating to the health, education, support, or

maintenance of decedent within the meaning of section

2041(b)(1)(A).    Consequently, the estate maintains, decedent’s

power to withdraw does not constitute a general power of appoint-

ment.

     Respondent counters that RCWA 11.95.100 did not apply to

decedent’s power to withdraw.      In support of that position,

respondent relies on Wash. Rev. Code Ann. sec. 11.95.140 (West

Supp. 1996) (RCWA 11.95.140).

     RCWA 11.95.140, which prescribed rules as to the applicabil-

ity of RCWA 11.95.100 (and Wash. Rev. Code Ann. sec. 11.95.110

(West 1998)), provided in pertinent part as follows:

     11.95.140. Exercise of power in favor of holder–-
     Applicability



     9
        RCWA 11.95.100 provided:

     11.95.100. Exercise of power in favor of holder–-
     Limitations

          If the standard governing the exercise of a life-
     time or a testamentary power of appointment does not
     clearly indicate that a broader or more restrictive
     power of appointment is intended, the holder of the
     power of appointment may exercise it in his or her
     favor only for his or her health, education, support,
     or maintenance as described in section 2041 or 2514 of
     the Internal Revenue Code and the applicable regula-
     tions adopted under the section.
                                 - 27 -

          (1)(a) RCW 11.95.100 and 11.95.110 respectively
     apply to a power of appointment created under a will,
     codicil, trust agreement, or declaration of trust,
     deed, power of attorney, or other instrument executed
     after July 25, 1993, unless the terms of the instrument
     refer specifically to RCW 11.95.100 or 11.95.110 re-
     spectively and provide expressly to the contrary.

          (b) Notwithstanding (a) of this subsection, for
     the purposes of this section a codicil to a will, an
     amendment to a trust, or an amendment to another in-
     strument that created the power of appointment in
     question shall not be deemed to cause that instrument
     to be executed after July 25, 1993, unless the codicil,
     amendment, or other instrument clearly shows an intent
     to have RCW 11.95.100 or 11.95.110 apply.

          (2) Notwithstanding subsection (1) of this sec-
     tion, RCW 11.95.100 through 11.95.150 shall apply to a
     power of appointment created under a will, codicil,
     trust agreement, or declaration of trust, deed, power
     of attorney, or other instrument executed prior to July
     25, 1993, if the person who created the power of ap-
     pointment had on July 25, 1993, the power to revoke,
     amend, or modify the instrument creating the power of
     appointment, unless:

          (a) The terms of the instrument specifically
     refer to RCW 11.95.100 or 11.95.110 respectively and
     provide expressly to the contrary; or

          (b) The person creating the power of appointment
     was not competent, on July 25, 1993, to revoke, amend,
     or modify the instrument creating the power of appoint-
     ment and did not regain his or her competence to re-
     voke, amend, or modify the instrument creating the
     power of appointment on or before his or her death or
     before the time at which the instrument could no longer
     be revoked, amended, or modified by the person.

     At the time it enacted RCWA 11.95.100, which was effective

as of July 25, 1993, the legislature of the State of Washington

decided that that section was to apply to any power of appoint-

ment created under an instrument executed after that effective

date.   See RCWA 11.95.140(1).    The legislature of the State of
                                - 28 -

Washington further decided when it enacted RCWA 11.95.100 that

RCWA 11.95.100 also was to apply to any power of appointment

created under an instrument executed prior to July 25, 1993, if

the person who created such a power had on July 25, 1993, the

power to revoke, amend, or modify the instrument creating that

power.    See RCWA 11.95.140(2).10

     In order for RCWA 11.95.100 to apply to decedent’s power to

withdraw, Carl A. Christensen, decedent’s spouse who created

decedent’s power to withdraw pursuant to the will that he exe-

cuted on August 26, 1980, was required to have on July 25, 1993,

the power to revoke, amend, or modify that will.    See RCWA

11.95.140(2).    Carl A. Christensen died on February 25, 1982.

Obviously, he did not have, and could not have had, on July 25,

1993, the power to revoke, amend, or modify his will creating

decedent’s power to withdraw.

     On the record presented, we find that RCWA 11.95.100 did not

apply to decedent’s power to withdraw.    The estate acknowledges

that if the Court were to find that RCWA 11.95.100 did not apply

to decedent’s power to withdraw, that power would constitute a

general power of appointment as defined in section 2041(b)(1).

Consequently, we sustain respondent’s determination in the notice

with respect to that power.



     10
      RCWA 11.95.140(2) contains two exceptions specified in
RCWA 11.95.140(2)(a) and (b) that do not apply in the instant
case.
                             - 29 -

     We have considered all of the contentions and arguments of

the estate that are not discussed herein, and we find them to be

without merit and/or irrelevant.

     To reflect the foregoing,


                                      Decision will be entered for

                                 respondent.
