(decedent's will, executed pre-Sept. 25, 1985, providing for decedent's property to pass to surviving spouse, children and grandchildren and charity; decedent later declared incompetent until death; beneficiaries battled over will interpretation and petitioner court for construction and reformation of will; parties enter into court-approved settlement specifying that amounts distributed pursuant to settlement not subject to GSTT and estate entitled to charitable deduction for amount passing to charity; IRS determined that no GSTT applied because of decedent's mental incompetency (Treas. Reg. Sec. 26.2601-1(b)(3)(i); charitable deduction allowed for amount passing to charity in accordance with Rev. Rul. 89-31, 1989-1 C.B. 277).