T.C. Sum m ary Opi ni on 20 16 -6 7

UNITED STAT ES TAX COURT

HARVEY C. HUBBELL T RUST, HARRY J. FI NKE, IV, T RUSTEE, Peti ti on er v. COM MIS SIONER OF INTERNAL REVENUE , Res po nd en t

Doc ke t No . 28 89 -1 2S . Fi le d Oct ob er 1 3, 2 01 6. Harry J. Fin ke IV (a trus te e), fo r pe ti ti on er. Nan cy P. Kli ng sh irn , forres po nd en t.

SUMM ARY OPINION W HALEN, Ju dg e: Thi s ca se was h eardpu rs ua ntto th e p ro vi si on s o f se ct io n 7 46 3 o f th e In te rn al Rev enue Co de in effe ctwhen th e p et it io n was fil ed . Pu rs ua ntto sec ti on 74 63 (b ), th e d eci si on to be en te redin th is cas e is no t rev ie wab le by any

ot he r co urt, an d thi s o pi ni on sh al l n otbe tre at edas p rece de nt fo r an y ot he r cas e. Res po nd en t d et erm in eda de fic ie nc y of $ 32 ,63 9 i n t he Fed eral- 2 -

in co m e ta x o f th e Harv ey C. Hub be ll Trus t (t ru stor Hubb el l Tru st ) fo r ta xabl e y ear 2 00 9. Th e so le is su e fo r de ci si on is whethe r th e trus t i s en ti tl edto a ch ari tabl e co nt rib ut io n d educ ti on of $ 64 ,27 9 i n c om pu ti ng it s i nc om e ta x fo r ta xabl e y ear 2 00 9. Here in aft er, al l s ect io n re fere nc es are t o the Int ern al Rev enue Co de , as a m en de d a ndin effe ctfor20 09 , th e ta xabl e y ear i n i ss ue , un le ss st at ed ot he rwis e. Bac kg ro un d Thi s ca se was s ub m it te d wi th ou t t ria l u nd er Ru le 12 2 o f th e Tax Co urt Ru le s o f Prac ti ce an d P ro cedur e. Herei na fte r, al l Ru le refe ren ces are t o t he Tax Co urt Ru le s o f Prac ti ce an d P ro cedur e. Pu rs ua ntto th e ag reem en t o f th e p art ie s, th e cas e was subm it te d o n t he ba si s o f th e p le ad in gs , th e fac ts reci te d i n t he st ip ul at io n o f fac ts , andth e ex hi bi ts att ach edth eret o. Fu rth erm or e, eac h o f th e th ree t ru st ees of t he tru stfil edanun swo rnde cl arat io n u nd er p en al ty of pe rjury pu rs ua ntto 28 U.S.C. sec . 17 46 (20 12 ). The tru stis a te st am en ta ry tru stcrea te d u nd er the las t wi ll an d t es tam en t o f Harv ey C. Hub be ll ex ecu te d o n Oct ob er 1 4, 1 95 5 (h erei na fte r wil l). Fo ll owi ng Mr. Hubb el l’s d eat h, o n Oct ob er 1 , 19 57 , th e wil l was adm it te d t o p ro ba te be fo re th e Co urt o f Co m

m on Ple as , Ham il to n C ou nt y , Ohi o, Pr ob at e Div is io n (p ro ba te co urt). In 19 60 , aft er the fin al di strib ut io n o f Mr. Hubb el l’s es ta te , th e tr us t,- 3 -

de sc rib edin it em

IV of t he wil l, ca m e in to ex is te nc e. Ite m IV of t he wil l p ro vi de s as fol lo ws: ITEM IV

All th e res t, re si du e an d re m ai nd er o f m y est at e, I g iv e, de vi se an d b eque ath t o my

Trus te es he rei na fte r na m ed , andto th ei r su cces so rs in tru st . The Tru st ees sh al l m ak e p aym en t o utof n et in co m e if av ai labl e, ot he rwis e o utof p rin ci pa l, as fol lo ws: (a) To ea ch si st er an d b ro th er o f m in e th enli vi ng su ch am ou ntas my

ex ecu to rs an d t ru st ees de em be st bu t n otin ex ces s o f on e h un dr eddo ll ars ($1 00 .00 ) pe r m on th forli fe; (b ) To ea ch bl oo d n ie ce an d n ep he w of m in e th en li vi ng su ch am ou ntas my ex ecu to rs an d t ru st ees de em be stbu t n otin ex ces s o f fi fty do ll ars ($ 50 .00 ) pe r m on th forli fe; (c) To EdW ag ne r th e su m of F iv e Hun dr edDol la rs ($ 50 0.0 0) ; (d ) To Is ab el l L. Kirc he r th e su m of On e Hun dr ed Dol la rs ($1 00 .00 ) pe r m on th forli fe; an d (e) To Cl aren ce Ca es ar the su m of S ev en ty-Fiv e Dol la rs ($7 5.0 0) pe r m on thforli fe. Ite m V of the wil l p ro vi de s t ha t t he tru stwil l t erm in at e upo n the de ath o f th e la stpe rs on rece iv in g b en efi ts un de r th e trus t, u nl es s the tru st ees de ci de to co nt in ue th e trus t u nd er the term s s etou t i n tha t p ro vi si on . Item V pro vi de s as fol lo ws:- 4 - ITEM V The tru stlas t ab ov e m en ti on edsh al l t erm in at e upo n t he de ath of th e la stpe rs on rece iv in g b en efi ts th eref ro m , exc ep t t ha t i f in th e jud gm en t o f th e th enTrus te es itis advi sabl e to co nt in ue th e trus t, i t m ay be co nt in ue d fo r no t l on ge r th anten (10 ) y ears aft er s uc h d eat h. All un us edin co m e an d t he rem ai nd er o f th e p rin ci pa l s ha ll be us ed an d d is tri bu te d, i n s uc h p ro po rti on as t he Trus te es de em be st , forsu ch pu rp os e o r pu rp os es , to be sel ect edby the m as t he ti m e o f eac h di st rib ut io n, as wil l m ak e su ch us es an d d is tri bu ti on s ex em ptfro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no ot he r pu rp os e. In20 09 on ly two b en efi ci ari es were en ti tl edto rece iv e p aym en ts un de r it em IV of th e wil l, Cl aren ce E. Cae sa r an d F ran ces Cle ve la nd , on e o f Mr. Hubb el l’s ni eces . Duri ng 20 09 th e trus te es m ad e m on th ly paym en ts to th em to ta li ng $1 ,50 0 as di rect edby the wil l. Mr . Caes ar d ie d dur in g the fol lo win g year. Inad di ti on to th e trus t, i te m II o f th e wil l co nt em

pl at es th e cre at io n o f a
m ari ta l tru stforth e b en efi t o f Mr. Hubb el l’s wi fe, Grac e. Ite m II p ro vi de s tha t, i f sh e were t o s urvi ve , th enon e-h al f of Mr. Hubb el l’s es ta te wou ldbe co nt rib ut edto th e m ari ta l t ru stan d t he tru st ees wou ldpa y th e in co m e th eref

ro m to Grace f

orli fe. Ite m II al so di rect s t he tru st ees to pa y th e rem ai nd er o f th e m ari ta l t ru stas Gra ce m ig htdi rectin he r la stwil l. It em II fu rth er p ro vi de s t ha t i f sh e were t o m ak e n o su ch di rect io n i n h er l as t wi ll , th enth e rem ai ni ng ass et s o f th e m ari ta l t ru stwou ld be co m e p artof t he tru stest ab li sh edun de r it em IV of t he wil l. Grac e d idno t su rv iv e h er h us ba nd , andth e m ari ta l t ru stdi d n otco m e in to ex is te nc e.- 5 -

The wil l ap po in ts th ree i nd iv idua ls , in cl ud in g Al to n E. Pu rcel l, Es qu ire , Mr. Hub be ll ’s att orne y , to be “ Exe cu to rs an d Tru st ees ”. They are gi ve n b ro adpo wers to m an ag e Mr. Hubb el l’s es ta te an d t he two tru st s d es cri be d abo ve . They are a ls o gi ve n t he po wer t o c reat e a fo un da ti on or o th er s im il ar o rg an iz at io n “ in ord er t o co m pl y with my wis he s as to th e d is po si ti on of t he res idue of my est at e”. It em VIII p ro vi de s i n p artas f ol lo ws: ITEM VIII * * * * * * * W it ho utli m it in g the ge ne ral po wers of my ex ecu to rs an d tru st ees , I au th or iz e an d e m po wer the m , inth ei r so le di sc ret io n a nd wit ho utan y

ord er o f co urt, t o d o a ny or al l o f th e th in gs setforth in th e fo ll owi ng pa rag rap hs , whi ch , andup on su ch pri ces , term s an d co nd it io ns as, t he y

de em advi sabl e: * * * * * * * 9. Org an iz e an d i nc or

po rat e, if th ey de em be stin ord er t o co m pl y with m y wis he s as to th e d is po si ti on of t he res idue of my es ta te , a fo un da ti on or o th er s im il ar o rg an iz at io n. The tru st ees have ne ve r es tabl is he d afou nd at io n o r ot he r si m il ar o rg an iz at io n pu rs ua ntto th e ab ov e p ro vi si on . On M arch 16 , 19 60 , th e ex ecu to rs an d tru st ees of t he Est at e o f Harv ey C. Hub be ll , Deceas ed , fil edanin ve nt ory of t he pe rs on al pro pe rty andreal pro pe rty be lo ng in g t o t he de ceas edMr. Hubb el l, i nc lu di ng th e v al ue of t he y earl y ren ta l o f- 6 -

th e rea l p ro pe rty. T he to ta l v al ue of M r. Hub be ll ’s pro pe rty onth atda te , in cl ud in g th e v al ue of t he y earl y

ren ta l o f th e rea l p ro pe rty, was sh own on th e in ve nt ory as $2 ,00 1,8 33 .41 . Fro m th atti m e u nt il 20 09 , th e y ear i n i ss ue , th e trus te es m an ag edth e as se ts of th e trus t, the y

pa idfees an d e xp en se s, an d fr om th e n etin co m e o f th e trus t t he y m ad e th e d is tri bu ti on s re qu ire d u nd er i te m IV of t he wil l. Fro m

ti m e to ti m e, th e tru st ees als o c au se d t he tru stto m ak e ch ari tabl e co nt rib ut io ns as d efi ne d b y se ct io n 1 70 (c). The in fo rm at io n s etforth in th e fo ll owi ng sch edul e was tak enfro m a sa m pl in g o f th e Fo rm s 1 04 1, U.S. In co m e Tax Return fo r Est at es an d Tru st s, tha t were fi le d o n b eh al f of

th e trus t fr om

19 85 th ro ug h 2 00 8. Inth e fo ll owi ng sc he du le , th e se co ndco lu m n l is ts th e in co m e rec ei ve d b y th e trus t fo r eac h o f th e y ears sh own ; t he th irdco lu m n l is ts th e to ta l i nd iv idua l p aym en ts th atwere m ad e by the tru stun de r it em

IV of t he wil l fo r eac h o f th os e y ears ; an d the fou rth co lu m n l is ts th e ch ari tabl e co nt rib ut io n d educ ti on s cl ai m edby the tru stfor each of th os e y ears :- 7 - Char it ab le con tri bu ti on Year Inc om e D is tri bu ti on s deduc ti on 19 85 $7 00 ,30 4 $2 ,70 0 $3 84 ,97 6 19 88 46 ,83 0 2,1 00 77 ,90 0 19 91 18 7,6 10 2,1 00 159 ,44 1 19 94 13 8,4 45 2,1 00 139 ,45 0 19 97 17 5,0 08 2,1 00 146 ,93 3 20 01 12 5,4 65 2,1 00 99 ,14 8 20 05 15 9,3 06 1,5 00 125 ,27 4 20 08 11 2,4 03 1,5 00 86 ,86 4 Dur in g 2 00 9 t he tru stm ad e ch ari tabl e co nt rib ut io ns , withi n t he m ean in g o f se ct io n 1 70 (c), o f cas h t ot al in g $ 26 ,70 0. Du rin g t ha t year, th e trus t al so m ad e ch ari tabl e co nt rib ut io ns withi n t he m ean in g o f se ct io n 1 70 (c) o f sh ares of s to ck va lu edat $ 88 ,63 0.8 9. Th e trus t’s i nc om e ta x re tu rnfor20 09 cla im eda ch ari tabl e co nt rib ut io n d educ ti on of $ 64 ,27 9. Acco rd in g t o the tru st ’s return, t ha t am ou nt was co m pu te d a s fo ll ows :- 8 - Descri pt io n o f It em Am ou nt Tot al co nt rib ut io ns in cas h $2 6,7 00 .00 Tot al co nt rib ut io ns in st oc k 88 ,63 0.8 9 Tota l ch ari tabl e co ntrib ut io ns 11 5,3 30 .89 Subt ract : Am ou ntsetasi de forrel ig io us , cha rit ab le or e du cat io na l p ur po se s for t he y ear e nd ed12 /3 1/ 08 (53 ,94 2.4 8) 61 ,38 8.4 1 Add : Am ou ntsetasi de forrel ig io us , cha rit ab le or e du cat io na l p ur po se s fo r th e y ear e nd ed12 /3 1/ 09 3,6 20 .59 Am ou nt s p ai d o r pe rm an en tl y setasi de for c ha rit ab le pu rp os es 65 ,00 9.0 0 Tax -ex em

ptin co m e al lo cab le to cha rit ab le co nt rib ut io ns (73 0.0 0) Ch ari tabl e co nt rib ut io n d educ ti on 64 ,27 9.0 0 On Dec em

be r 27 , 20 13 , th e trus te es fil edwith t he pro ba te co urt a C om pl ai nt fo r Decl arat ory

Rel ie f or , inth e Alt ern at iv e, Mo di fic at io n o f Tru st . The p ro ba te co urt en te redanag reedjud gm en t o n Ap ril 2, 2 01 4, wh erei n i t ci te d i te m V and it em VIII, p arag rap h 9 , of the wil l, quo te d abo ve , anden te redth e fo ll owi ng jud gm en t:- 9 - The lan gu ag e o f th e Will , as wri tt en , pro vi di ng forth e adm in is tra ti on of t he Trus t, au th or iz es , andha s fr om th e in cep ti on of th e Tru stau th or iz ed , th e Tru st ees of t he Trus t t o m ak e d is tri bu ti on s of in co m e an d p rin ci pa l fo r ch ari tabl e p ur po se s s pe ci fie d i n In te rn al Rev enue Co de sec ti on 17 0( c), o r th e co rres po nd in g p ro vi si on of a ny subs eque ntfed eral tax law, b oth c urren tl y an d upo n t erm in at io n o f th e Tru st . Dis cu ss io n The W il l Mr. Hubb el l’s wi ll co nt em pl at edth e cre at io n o f two tes ta m en ta ry tru st s. Fi rs t, i n i te m

II o f th e wil l M r. Hub be ll di rect edth ata m ari ta l tru stbe crea te d fo r hi s wi fe, Grac e, if

sh e su rv iv edhi m . He di rect edth atth e m ari ta l t ru stbe fun de d wit h o ne -h al f of

hi s es ta te , aft er the paym en t o f hi s d eb ts , andth atGrace r ecei ve al l o f th e in co m e fro m

th e m ari ta l t ru stforli fe wi th a te st am en ta ry po wer o f ap po in tm en t. If Gra ce fa il edto ex erci se he r po wer o f ap po in tm en t upo n h er d eat h, th enMr. Hubb el l d ire ct edth atth e rem ai nd er o f th e m ari ta l tru stwou ldbe co m e pa rt o f th e se co ndtru st . The sec on d t ru stco nt em

pl at edby Mr. Hub be ll ’s wil l i s t he tru stest ab li sh ed un de r it em

IV in whi ch Mr. Hubb el l d ire ct edth atm on th ly paym en ts be m ad e fo r li fe t o e ach of h is si st ers an d b ro th ers , bl oo d n ie ces an d n ep he ws, an d t wo n am ed in di vi du al s, i f th ey

su rv iv edhi m . W e so m et im es refe r to th es e p aym en ts as an nu it ie s an d t o t he be ne fic ia rie s u nd er i te m IV as a nn ui ta nt s. Mr . Hub be ll als o- 10 -

di rect edth e trus te es to m ak e su ch pa ym en ts “ ou t o f ne t i nc om e if av ai labl e, ot he rwis e o utof p rin ci pa l” . The tru stwas t o b e fu nd edwith t he res idue of M r. Hub be ll ’s est at e, aft er the pa y m en t o f ap pr ox im at el y

on e-h al f of

hi s as se ts to th e m ari ta l tru st , if a m ari ta l t ru stwere es tabl is he d, an d t he pa y m en t o f al l i nh eri ta nc e an d e st at e ta xe s. Init em V of the wil l, Mr . Hub be ll di rect edth atth e trus t t erm in at e upo n t he de ath o f th e la stpe rs on rece iv in g p aym en ts un de r it em IV un le ss th e trus te es co nt in ue th e trus t fo r a p eri odno lo ng er tha n 1 0 years. Du rin g s uc h aco nt in ua ti on pe rio d, M r. Hub be ll di rect edth e trus te es to us e an d d is tri bu te th e trus t as se ts in su ch a way

as t o m ak e th e “ us es an d d is tri bu ti on s ex em ptfro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no ot he r pu rp os e”. Inth is op in io n, we as su m e ad arg ue nd o tha t t hi s quo te d p hr as e fro m it em V aut ho riz es th e trus te es to m ak e ch ari tabl e co nt rib ut io ns , as d efi ne d b y sec ti on 17 0( c). As i t turne d o ut , Ms . Hub be ll di d n otsu rv iv e h er hus ba ndan d t he m ari ta l tru stco nt em

pl at edun de r it em

II n ev er ca m e in to ex is te nc e; on ly the tru st es tabl is he d u nd er i te m

IV cam e in to ex is te nc e. Fro m 19 60 , whenth attru stbe ga n to op erat e, th ro ug h 2 00 9, t he y ear i n i ss ue , a pe rio d o f al m os t 5 0 years, t he re were li vi ng be ne fic ia rie s en ti tl edto rece iv e p aym en ts un de r it em IV, andth e tr

us te es na m edin Mr. Hubb el l’s wi ll , andth ei r su cces so rs , m ad e th e p aym en ts requi redby- 11 -

th atpro vi si on . Thu s, dur in g t he ex is te nc e o f th e tr us t t o t ha t p oi nt , th ere was ne ve r a t erm in at io n o f th e trus t u nd er i te m V. The trus te es ne ve r ha d t he op ti on of in vo ki ng it em

V to co nt in ue th e trus t, an d t o u se an d d is tri bu te all un us edin co m e an d t he rem ai nd er o f th e p rin ci pa l, as wou ldm ak e “ su chus es an d d is tri bu ti on s ex em ptfro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no ot he r pu rp os e”. Thro ug ho utth e trus t’s ex is te nc e th ro ug h 2 00 9, t he tru st ees reg ul arl y us ed tru stass et s t o m ak e cas h a ndno nc as h c ha rit ab le co nt rib ut io ns withi n t he m ean in g of sec ti on 17 0( c), an d t he y

cla im edde du ct io ns forsu ch co nt rib ut io ns on th e trus t’s Fed eral in co m e ta x re tu rn s. Th e is su e b efo re u s i nv ol ve s t he ch ari tabl e co nt rib ut io n d educ ti on of $ 64 ,27 9 c la im edby the tru stfor 20 09 . The Am ou ntDedu ct edfor20 09 A sch edul e at ta ch edto th e trus t’s 2 00 9 re tu rnsh ows ho w th e trus t’s ch ari tabl e co nt rib ut io n d educ ti on was c om pu te d. Th atco m

pu ta ti on st art s wi th th e cas h c on tri bu ti on s o f $2 6,7 00 an d t he no nc as h c on tri bu ti on s o f $8 8,6 30 .89 th at were m ad e dur in g t he y ear t o v ari ou s ch ari tabl e o rg an iz at io ns , a to ta l o f $1 15 ,33 0.8 9. Fro m

th atto ta l, the re i s s ub tra ct ed$5 3,9 42 .48 , des cri be d a s t he

“ am ou ntsetasi de forrel ig io us , charit ab le or e du cat io n p ur po se s fo r th e y ear en de d 1 2/ 31 /0 8” , andth ere i s ad de d $ 3,6 20 .59 , des cri be d a s t he “ am ou ntsetasi de fo r rel ig io us , cha rit ab le or e du cat io n p ur po se s fo r th e y ear e nd ed12 /3 1/ 09 ”. The- 12 -

su m of t ho se am ou nt s, $ 65 ,00 9 ($ 11 5,3 30 .89 , les s $ 53 ,94 2.4 8, p lu s $ 3,6 20 .59 ), was rep orte d o n S ch edul e A, Cha rit ab le Dedu ct io n, o f th e trus t’s 2 00 9 re tu rnas th e am ou nt“pa idor p erm an en tl y setasi de forch ari tabl e p ur po se s fr om

gro ss in co m e”. Aft er al lo cat in g t ax -ex em ptin co m e o f $7 30 to th atam ou nt , th e trus t cl ai m edth e d iff

eren ce, $ 64 ,27 9, as a ch ari tabl e co nt rib ut io n d educ ti on un de r se ct io n 6 42 (c) (i .e., $6 5,0 09 m inus $7 30 ). Res po nd en t’s Po si ti on Res po nd en t d is al lo wedth e ch ari tabl e co nt rib ut io n d educ ti onof $ 64 ,27 9 cl ai m edby the tru stfortax ab le y ear 2 00 9. Th is was the on ly adjus tm en t m ad e in th e n ot ic e o f de fic ie nc y

is su edto th e trus t fo r th aty ear. Re sp on de ntco nc ed es th at th e co nt rib ut io ns du rin g t ha t year were p ai d fo r a p ur po se sp eci fie d i n s ect io n 17 0( c). Nev ert he le ss , res po nd en t as se rts th atth e trus t i s n oten ti tl edto de du ctth e am ou ntco nt rib ut edbe cau se no ne of t he co nt rib ut io ns was m ad e “pu rs uantto th e te rm s o f th e g ov ern in g i ns tru m en t” , as re qu ire d b y sec ti on 64 2( c)(1 ). Acco rd in g to res po nd en t, n o p ro vi si on of t he wil l au th or iz edth e trus te es to m ak e ch ari tabl e co nt rib ut io ns fortax ab le y ear 2 00 9 o r fo r an y ot he r y ear. Th us , res po nd en t as se rts th atth e ch ari tabl e co ntrib ut io ns m ad e dur in g 2 00 9 a re n otde du ct ib le un de r se ct io n 6 42 (c)( 1) .- 13 -

As a g en eral rul e, th e Co m m is si on er’s d et erm in at io n i n ano ti ce o f de fic ie nc y

is pre su m edco rrec t, an d the tax pa y er b ears th e b ur de n o f pr ov in g t ha t th e d et erm in at io n i s i n e rro r. Ru le 14 2( a). Deduc ti on s ar e a m at te r of leg is la ti ve gr ace, a ndth e ta xp ay er b ears th e b ur de n o f pr ov in g e nt it le m en t t o a ny deduc ti on s cl ai m ed . INDOPCO, Inc . v. Co m m is si on er, 5 03 U.S. 79 , 84 (19 92 ); Ne w Col on ia l Ice C o. v . Helv eri ng , 29 2 U.S. 4 35 , 44 0 (1 93 4) . The Po si ti on of t he Trus t Eve n t ho ug h t he tru stackno wled ge s t ha t t he is su e in th is cas e is whet he r it s tru st ees were au th or iz edby the wil l t o m ak e ch ari tabl e g ift s dur in g 2 00 9, i t p oi nt s to no pro vi si on in th e wil l b y whi ch Mr. Hubb el l ex pr es sl y au th or iz edth e trus te es to m ak e su ch gi fts . The tru stass ert s t ha t the Co urt ca n g o b ey on d t he pro vi si on s of th e wil l t o d et erm in e Mr. Hubb el l’s i nt en t b ecau se th ere i s a l at en t am bi gu it y in th e wil l. A la te ntam

bi gu it y ha s b een de fin edas f

ol lo ws: A lat en t am

bi gu it y is a de fectwhi ch do es no t ap pe ar o n t he face of l an gu ag e u se d o r anin st ru m en t b ei ng co ns id ered . It ari se s whe n l an gu ag e is cle ar an d i nt el li gi bl e an d s ug ge st s b uta si ng le m ean in g, b utso m e in tri ns ic factor s om e ex tra ne ou s ev id en ce cr eat es a n eces si ty for i nt erp ret at io n o r a ch oi ce b etweentwo or m or e po ss ib le m ean in gs , as wh ere t he word s ap pl y equa ll y well to two or m or e d iff eren t s ub jects or t hi ng s. Co nk le v. Co nk le , 28 5 N.E.2d88 3, 8 87 -8 88 (19 72 ); s ee M ic he ls en -Cal dwe ll v. Cro y , No. W D-0 8- 00 1, 2 00 8 WL 38 78 37 1 (Oh io Ct. Ap p. Au g. 2 2, 2 00 8) ; Cl in e- 14 -

v. Lewt on , No. 1 64 66 , 19 94 W L 14 92 59 (Ohi o C t. Ap p. Ap r. 27 , 19 94 ); c f. W oo ds v. Co m

m is si on er, 9 2 T.C. 7 76 (19 89 ). The tru starg ue s t ha t, “ [t]o t he ex te ntth e la ng ua ge of t he Hub be ll W il l i s n ot cl ear i n e xp li ci tl y

au th or iz in g c ha rit ab le gi fts , itco nt ai ns a la te ntam bi gu ity ”. The tru starg ue s t ha t t he lat en t am bi gu it y is rev eal edby the factth atth e tr us te es of t he tru st(in cl ud in g Al to n E. Pu rcel l, wh o was Mr. Hubb el l’s at to rn ey an d

“pr es um ab ly” kn ew hi s i nt en t, an d wh o p ro babl y dra fte d the wil l) “ ha ve co ns is te nt ly exerc is edth ei r du ti es with t he un de rs ta nd in g t ha t t he W il l au th or iz ed th em to m ak e ch ari tabl e g ift s” . As a res ul t, the tru starg ue s, the Co urt ca n u se ex tri ns ic ev id en ce t o re so lv e th e la te ntam bi gu it y in th e wil l an d t o fi ndth atMr. Hub be ll in te nd edhi s t ru st ees to m ak e th e ch ari tabl e co nt rib ut io ns th atwere m ad e du rin g t ax ab le y ear 2 00 9. Acco rd in g t o t he tru st , th ere i s ample e vi de nc e th atMr. Hubb el l i nt en de d t o au th or iz e it s t ru st ees to us e trus t as se ts to m ak e ch ari tabl e co nt rib ut io ns . This ev id en ce i nc lu de s t he pro vi si on s o f th e wil l, s pe ci fic al ly item V, whic h aut ho riz es th e trus te es to co nt in ue th e trus t fo r 10 y ears aft er i t wo ul d o th erwi se term in at e, as lo ng as “ al l u nu se d i nc om e an d t he rem ai nd er o f th e p rin ci pa l” sh al l b e u se d a nd di st rib ut edforsu ch pu rp os e o r pu rp os es “ as wil l m ak e su ch us es an d d is tri bu ti on s ex em ptfro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no ot he r pu rp os e”.- 15 -

The tru stals o p oi nt s t o i te m VIII, p arag rap h 9 , of t he wil l, wh ic h autho riz es th e tru st ees to org an iz e an d i nc or po rat e a fo un da ti on or o th er s im il ar o rg an iz at io n t o carry ou t M r. Hub be ll ’s wis he s “ as to th e d is po si ti on of the res idue of my est at e”. The ev id en ce al so in cl ud es th e ro le of Al to n E. Pu rcel l, Mr . Hub be ll ’s at to rn ey , who pro babl y

dra fte d t he wil l, an d wh o, al on g wi th th e o th er o rig in al an d su cces so r trus te es for

ov er 5 0 years, “ ne ve r ha d re as on to qu es ti onth at ” Mr. Hub be ll in te nd edth e trus t t o m ak e ch ari tabl e co nt rib ut io ns . The ev id en ce al so in cl ud es th e fac t t ha t t he ass et s o f th e trus t fa r ex ceed edth e am ou ntne ces sa ry to m ak e th e small i nd iv idua l p aym en ts requi redby item IV an d s ug ge st s tha t M r. Hub be ll in te nd edth e ex ces s t o b e u se d fo r ch ari tabl e p ur po se s. Fi na ll y , th e trus t as se rts th atth e ag reedjud gm en t en try of the pro ba te co urt is co ns is te ntwith t he ab ov e ev id en ce o f Mr. Hubb el l’s i nt en t b ecau se , as m en ti on edab ov e, th e jud gm en t fo un d t ha t “ th e la ng ua ge of t he W il l au th or iz es , an d h as fro m

th e in cep ti on of the Trus t, au th or iz edth e Tru st ees to m ak e di st rib ut io ns of i nc om e an d p rin ci pa l fo r ch ari tabl e p ur po se s s pe ci fie d i n In te rn al Rev enue Co de sec ti on 17 0( c) * * * bo th cu rren tl y an d upo n t erm in at io n o f th e Trus t” . The tru stcit es Co m m is si on er v . Est at e o f Bo sc h, 3 87 U.S. 45 6 (1 96 7) , and arg ue s t ha t “ [w]hil e th e Pro ba te Co urt’s jud gm en t i s n otbi nd in g o n t hi s C ou rt” , th e Co urt s ho ul d g iv e p ro pe r reg ardto th e jud gm en t i n d eci di ng th e is su e b efo re i t.- 16 -

Ana lysis W e m us t d eci de whethe r th e trus t i s en ti tl edto th e ch ari tabl e co nt rib ut io n de du ct io n o f $6 4,2 79 itcla im edun de r se ct io n 6 42 (c)( 1) for tax ab le y ear 2 00 9. The tru st , whi ch be ars th e b ur de n o f pr oo f as to th is is su e, m us t d o t hr ee thi ng s: (1 ) id en ti fy

th e “ go ve rn in g i ns tru m en t” ; (2 ) sh ow tha t t he ch ari tabl e co nt rib ut io ns were p ai d “ pu rs ua ntto ” th e te rm s o f th atin st ru m en t as requi redby sect io n 64 2( c)(1 ); a nd(3) de m on strat e th ateach co nt rib ut io n was pa idfora ch ari tabl e pu rp os e u nd er s ect io n 1 70 (c). See Bro wns to ne v. Un it edSta te s, 4 65 F.3d52 5, 52 9 (2 d C ir. 2 00 6) . The p art ie s ag ree t ha t t he wil l i s t he “ go ve rn in g i ns tru m en t” . The y als o a gr ee tha t ea ch of t he subjec t co ntrib ut io ns was p ai d fo r a ch ari tabl e pu rp os e u nd er s ect io n 1 70 (c). Th us , th e trus t n eedon ly sho w th atth e ch ari tabl e co nt rib ut io ns were m ad e “pu rs ua ntto ” th e te rm s o f th e wil l, as requi redby sect io n 64 2( c)(1 ). InOldCo lo ny Tr. Co . v. Co m m is si on er, 3 01 U.S. 37 9 (1 93 7) , th e Supr em e Co urt co ns id eredth e m ean in g o f th e wor ds “pu rs ua ntto ” in th e co nt ex t o f a tru st , li ke th e Hub be ll Trus t, tha t was est ab li sh edto pa y an nu it ie s t o c ert ai n i nd iv idua ls fro m th e g ro ss in co m e o f th e trus t. The is su e in th atcas e was whet he r th e ch ari tabl e co nt rib ut io ns m ad e b y th e trus t dur in g t he y ear 1 93 1 h adbe enpa id

“pu rs ua ntto ” th e g ov ern in g t ru stde ed , su ch th atth e trus t was en ti tl edto de du ct- 17 -

th e co nt rib ut io ns un de r a p red eces so r of sec ti on64 2( c). Unl ik e Mr. Hubb el l’s wil l, the tru stde edin th atcas e ex pr es sl y au th or iz edth e tr

us te es to pay

to ch ari ti es

“ su ch su m s as in th ei r jud gm en t m ay be pa idwitho utjeop ard iz in g t he an nu it ie s he rei n p ro vi de d fo r” wh en ev er the ne t i nc om e fo r th e y ear e qu al edtwi ce the am ou ntof t he an nu it ie s t o b e p ai d. Id . at 3 80 . The Co m m is si on er ar gu edth atth e ch ari tabl e co nt rib ut io ns were n otm ad e

“pu rs ua ntto ” th e trus t d eedan d wer e n otde du ct ib le be cau se th e trus t d eedlef t t he de ci si on to th e d is cret io n o f th e fi du ci ary, an d i t d idno t d ire ctth e fi du ci ary to m ak e th e ch ari tabl e co ntrib ut io ns . Id. at38 2- 38 3. Th e Supr em e Co urt re jecte d th e Co m m is si on er’s arg um en t, o n t he gro un d t ha t t he pl ai n m ean in g o f th e wor ds

“pu rs ua ntto ” is “ act in g o r do ne in co ns eque nc e o r in pro se cu ti on (of an yth in g) ; he nc e, ag reeabl e; co nf

orm ab le ; fo ll owi ng ; o r acc or di ng .” Id . at 3 83 (qu ot in g W eb st er’s New In te rn at io na l Di ct io na ry , Unab rid ge d (2 d e d. 1 93 5) ). The C ou rt reject edth e Co m

m is si on er’s p os it io n t ha t t he word s s ho ul d b e in te rp ret edto m ean

“ di rect edor d efi ni te ly enjoi ne d.” Id. at38 3- 38 4. Th e Co urt h el d t ha t t he tru stwas en ti tl edto a ch ari tabl e co ntrib ut io n d educ ti onbe cau se th e fi du ci ary was au th or iz ed , eve n t ho ug h t he fiduc ia ry was n otrequi redby the tru stin st ru m en t, t o m ak e ch ari tabl e co nt rib ut io ns , andth e fi du ci ary di d, i n fa ct , m ak e ch ari tabl e- 18 -

co nt rib ut io ns . See J oh n Al la n Lo ve Ch ari tabl e Fo un d. v . Uni te d S ta te s, 7 10 F.2d 13 16 , 13 20 (8t h C ir. 1 98 3) . It i s i m po rta ntto no te th atun de r th e OldCo lo ny case a tr us t i s n oten ti tl ed to a ch ari tabl e co nt rib ut io n d educ ti on when th e fi du ci ary, act in g wi th ou t an y au th or it y un de r th e trus t i ns tru m en t, d is tri bu te s t ru stass et s t o c ha rit y . Id. at13 19
- 13 20 . The tru stin stru m en t m us t au th or iz e th e fi du ci ary to m ak e ch ari tabl e co nt rib ut io ns , inord er fo r a co urt t o fi ndth atth e ch ari tabl e co nt rib ut io ns were m ad e “pu rs ua ntto ” th e te rm s o f th e trus t i ns tru m en t. Id . It i s h el pf ul to co m pa re the Hub be ll cas e to OldCo lo ny Tr. Co . v. Co m m is si on er, 3 01 U.S. 37 9. Bo th cas es in vo lv e trus ts crea te d fo r th e p ur po se of pa y in g a nn ui ti es to cert ai n s pe ci fie d i nd iv idua ls for li fe. The tru stde edinOld Co lo ny dir ect edth e trus te es to m ak e th e sp eci fie d a nn ui ty paym en ts . Id. at38 0. Inad di ti on , th e tr

us t d eedex pr es sl y

au th or iz edth e trus te es to pa y to ch ari ti es , be fo re the de ath o f th e la stan nu it an t, “ su ch su m s as in th ei r jud gm en t m ay be pa id wit ho utjeop ard iz in g t he an nu it ie s” . Id. Aft er the de ath o f th e la stan nu it an t, the tru stde eddi rect ed , th e trus te es were t o d is tri bu te th e rem ai ni ng tru stass et s t o ch ari ty. Id. a t 3 80 -3 81 . Thu s, the tru stde edin th e OldCo lo ny case au th or iz edth e fiduc ia ry to m ak e ch ari tabl e co nt rib ut io ns be fo re the de ath o f th e la stan nu it an t,- 19 -

an d i t d ire ct edth e trus te es to di st rib ut e th e rem ai nd er o f th e as se ts to ch ari ty after th e d eat h o f th e la stan nu it an t. Mr. Hubb el l’s wi ll , on th e o th er h an d, m ak es no pro vi si on forth e p aym en t of an y ch ari tabl e co nt rib ut io ns be fo re the de ath o f th e la stan nu it an t. Du rin g t ha t pe rio d, t he on ly paym en ts fro m ne t i nc om e ex pr es sl y

pe rm it te d t o b e m ad e b y

th e tru stare t he an nu al an nu it y pa y m en ts sp eci fie d b y

Mr. Hubb el l i n i te m

IV. It i s no t u nt il aft er the de ath o f th e la stan nu it an t, wh enth e trus t t erm in at es pu rs ua ntto it em V, th atth e tr

us te es are p erm it te d t o c on ti nu e th e trus t, an d t o u se an d di st rib ut e u nu se d i nc om e an d t he rem ai nd er o f th e p rin ci pa l fo r a p ur po se “ ex em

pt fro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no othe r pu rp os e”. Thu s, it em s IV an d V co ns erv e th e as se ts of t he tru stby autho riz in g o nl y th e an nu al an nu ity pa ym en ts requi redby item IV un ti l af

te r th e an nu it ie s h av e b een pa idin fu ll . Thi s co ns erv at iv e ap pr oa ch is co ns is te ntwith t he factth atMr. Hubb el l’s wil l p ro vi de s n oton ly for the crea ti on of t he tru st , bu t al so forth e cre at io n o f a
m ari ta l tru stforhi s wi fe, an d d ire ct s i n i te m II th atth e m ari ta l t ru stbe gi ve n o ne ha lf o f hi s p ro pe rty afterth e p aym en t o f hi s d eb ts . If th e m ari ta l t ru stha d c om e in to ex is te nc e, th enth e trus t wo ul d h av e rec ei ve d l es s t han o ne -h al f of th e am ou nt itactua ll y rece iv ed . Rep res en ta ti ve s o f th e trus t fa il to tak e th e m ari ta l t ru stin to- 20 -

co ns id erat io n i n t he ir a rg um en t. We als o n ot e th atit em IV pro vi de s t ha t t he tru st ees sh al l m ak e th e an nu al annu ity pa ym en ts “ ou t o f ne t i nc om e if av ai labl e, ot he rwis e o utof p rin ci pa l” an d t he reb y su gg es ts a co nc ern ab ou t wh ethe r th e as se ts of t he tru stwou ldbe su ffi ci en t t o g en erat e en ou gh ne t i nc om e to pa y th e an nu al an nu it ie s. Fu rth erm or e, th e o pi ni on of t he Supr em e Co urt i n Ol d C ol on y pro vi de d cl ear aut ho rit y

to Mr. Hubb el l an d t he dra fte rs of h is wil l t o autho riz e, witho ut di rect in g, h is tru st ees to m ak e ch ari tabl e co nt rib ut io ns be fo re the de ath o f th e la st an nu it an t. See OldCo lo ny Tr. Co . v. Co m m is si on er, 3 01 U.S. 37 9. Th e o pi ni on al so sh ows th atMr. Hubb el l co ul d re st ric t s uc h aut ho rit y to pre ve ntth e ch ari tabl e co nt rib ut io ns fro m

jeop ard iz in g t he pa ym en t o f th e an nu it ie s, as was d on e in th e OldCo lo ny case . Id. at38 0. If M r. Hub be ll ha d i nt en de d t o g iv e h is tru st ees su ch au th or it y in hi s wi ll , he c ou ldeas il y ha ve do ne so . It i s d iff

ic ul t t o c on cl ud e th at hi s fa il ur e to gra ntau th or ity to hi s t ru st ees to m ak e ch ari tabl e co nt rib ut io ns be fo re th e d eat h o f th e la stan nu it an t was no t i nt en ti on al . Inth e co ns tru ct io n o f a wil l, the tes ta to r’s in te nt io n m us t b e as cert ai ne d fro m th e wor ds of the wil l. E.g., Oli ve r v. B an k On e, Dayto n, N.A., 57 3 N.E.2d 55 , 58 (Ohi o 1 99 1) ; Bo ul ge r v. Ev an s, 3 77 N.E.2d 7 53 , 75 7 (Oh io 19 78 ); Town se nd ’s Ex’rs v . Town se nd , 25 Ohi o S t. 4 77 (Ohi o 1 87 4) . As di sc us se d- 21 -

ab ov e, it em s IV an d V o f th e wil l s ho w th atMr. Hubb el l i nt en de d t o p ro vi de li fet im e an nu it ie s t o h is si st ers an d b ro th ers , ni eces an d n ep he ws, an d n am ed in di vi du al s, an d h e in te nd edth os e an nu it ie s t o b e fu ll y pa idbe fo re the ass et s o f th e trus t wer e u se d fo r an y ot he r pu rp os e, su ch as m ak in g c ha rit ab le gi fts . Co nt rary to t he cle ar l an gu ag e ex pr es si ng Mr. Hubb el l’s i nt en t t ha t n o ch ari tabl e co nt rib ut io ns be m ad e u nt il aft er the de ath o f th e la stbe ne fic ia ry , th e tru stcla im s t ha t M r. Hub be ll real ly int en de d t o aut ho riz e th e trus te es to m ak e ch ari tabl e g ift s b efo re the de ath o f th e la stbe ne fic ia ry . The tru starg ue s t ha t M r. Hub be ll ’s tru e in te ntcan no t b e d et erm in edfro m th e fo urco rn ers of h is wil l be cau se th ere i s a l at en t am bi gu it y in th e wil l tha t ca nn otbe res ol ve d wi th ou t co ns id eri ng ex tri ns ic ev id en ce i nv ol vi ng th e h is to ric op erat io n o f th e trus t. Fo r th ere t o b e an“ am

bi gu it y ” ina wil l, the word s o f th e wil l m us t h av e two orm or e m ean in gs , th ey

m us t b e u nd ers to odin m or e th anon e way , or t he y m us t refe r to two or m or e th in gs at t he same tim e. Bo ul ge r, 37 7 N.E.2dat 7 57 . For t he am bi gu it y to be a la te ntam

bi gu it y , th e la ng ua ge m

us t b e cl ear a ndin te ll ig ib le an d su gg es t b uta si ng le m ean in g, b utso m e in tri ns ic factor s om e ex trane ou s ev id en ce m us t cr eat e a n eces si ty for i nt erp ret at io n o r a ch oi ce b etweentwo or m or e p os si bl e m ean in gs , as wh ere t he word s ap pl y equa ll y well to two or m or e d iff

eren t s ub jects- 22 -

orth in gs . Mic he ls en -Cal dwe ll , 20 08 W L 38 78 37 1, at*3 ; Cl in e, 19 94 WL 14 92 59 , at * 2; Co nk le , 28 5 N.E.2dat 8 88 . The tru starg ue s t ha t t he am bi gu ity in th e wil l i s fo un d i n t he factth at“ th e la ng ua ge of t he Hub be ll W il l i s n otcle ar i n e xp li ci tl y au th or iz in g c harit ab le gi fts ”. Thu s, the tru starg ue s t ha t i te m s IV an d V, wh ic h s ta te in effe ctth atch ari tabl e gi fts can no t b e m ad e b efo re the de ath o f th e la stan nu it an t, ar e am bi gu ou s b ecau se th ey do no t ex pl ic it ly stat e th e o pp os it e, th atch ari tabl e g ift s ca n b e m ad e b efo re th e d eat h o f th e la stan nu it an t. Thi s i s n otanam bi gu it y in th e wil l. Itdo es no t in vo lv e anin te rp ret at io n o r a ch oi ce b etweenth e d iff eren t m ean in gs of wo rd s o f th e wil l t ha t h av e two or m or e m ean in gs , or wo rd s tha t ca n b e u nd ers to odin m or e th anon e way , or wo rd s t ha t re fer t o t wo o r m or e th in gs at t he same tim e. See Bo ul ge r, 37 7 N.E.2dat 7 57 . The tru stis no t as ki ng th e Co urt t o re so lv e a l at en t am bi gu it y . The tru stis ask in g t he Co urt t o re writ e th e wil l. Si nc e th ere i s n o a m

bi gu it y , th ere i s n o n eedto tu rnto ex tri ns ic ev id en ce, an d t he tes ta to r’s in te ntm us t b e d et erm in edfro m

th e wil l. Id . W e fi ndth atth e wil l p ro vi de s i n i te m s IV an d V tha t t he an nu it y pa ym en ts are t he on ly paym en ts th atcanbe m ad e fro m

ne t i nc om e b efo re the de ath o f th e la stan nu it an t, wh erea s aft er the de ath o f th e la stannu it an t, i f th e trus t i s co nt in ue d, t he un us edin co m e an d t he rem ai nd er o f pr in ci pa l ca n b e u se d a nddi st rib ut edfora pu rp os e “ ex em pt- 23 -

fro m Ohi o i nh eri ta nc e an d F ed eral est at e ta xe s an d fo r no othe r pu rp os e”. We fu rth er fi ndth atth e wil l p ro vi de s, i n e ffec t, tha t n o c ha rit ab le co nt rib ut io ns are t o be m ad e u nt il aft er the de ath o f th e la stbe ne fic ia ry . There fo re, the ch ari tabl e co nt rib ut io ns m ad e b y

th e trus t dur in g 2 00 9 wer e n otm ad e p ur su an t t o t he wil l, th e g ov ern in g i ns tru m en t, an d the y are n otde du ct ib le un de r se ct io n 6 42 (c). Any oth er co nt en ti on s m ad e b y th e tr us t t ha t we h av e n otad dr es se d are irr el ev an t, m oo t, o r m eri tl es s. Deci si on wil l b e en te red fo r res po nd en t.