The first 3 pages of the estate tax return, Form 706
give unambigous directions how the taxable estate is to
be calculated. Attached are those three pages which I
began to complete assuming that I had predeceased Mommy.
Look at Page 3, Part 5. Items number 1 through 9 are added
to calculate the Total gross estate. This value, the total
gross estate determines whether the filing of Form 706
is legally required. This is the case, as the law now stands,
if the Total gross estate is greater than 1 million dollars.

From the total gross estate are subtracted the allowable deductions,
items 13 through 21.
Item 21 from Schedule O is the sum of "Charitable, Public and Similar
Gifts and Bequests." Attached also is Schedule O of Form 706.

The tentative total allowable deductions are then entered on line 2
page 1, and subtracted from the total gross estate (line 1) and entered
on line 3a as the tentative taxable estate. That's as far as I have 
traced the labyrinthine path so far; but it seems unlikely
that Schedule O deductions, once allowed, will subsequently
be disallowed on some pretext or other.

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The answer to your second question about the use of funds for
educational grants is emphatically "yes". The draft purposes are:

E.2) Specific Purposes.
i) to aid and support individuals who compose, edit, invent, 
translate, publish, perform, disseminate or otherwise promote
works of music, theatre, literature, art and or science.
ii) to remunerate authors, artists, performers and or
scientists for their work and to defray their expenses.
iii) to provide studios, libraries, laboratories,
concert halls and or office space where writers, performers,
artists, musicians and scientists may realize their work.
iv) to acquire and maintain collections of books,
musical scores, scientific and or musical instruments, 
for use by authors, artists, musicians and or scientists.
v) to rent, lease or own real estate and personal property
required for or incident to the purposes in D.2.i-iv above.
vi) To fulfill any other function supportive of music,
visual or performing arts, literature or science.

Nonetheless, perhaps section E.2.vi should be expanded to read:

vi) To fulfill any other function supportive of music,
visual or performing arts, literature, EDUCATION, or science.

Three important considerations: 1) The trust is very flexible,
it can be amended by any trustee acting independently.
2) For the IRS almost anything is "charitable" which does not
constitute "self-dealing". The key concept is the prohibition
of transactions with "disqualified" persons. Much effort has
been poured into attempts to define who is disqualified, and what
is a "transaction". I'm confident that one can deal constructively
with this issue when it arises. The IRS is very sensitive to the
potential for abuse especially of "travel grants", and I think
wherever possible, mention of grants to individuals should be
guided by published precedents.

======================

Your third question I interpret as reference to tax sheltered
educational (financial) accounts. I'll find out more about them
and get back to you.

Thank you for your interest and for your help.