Document: 364 U.S. 410 81 S.Ct. 210 5 L.Ed.2d 161 Edward J. MEYER et al., Petitioners,v.UNITED STATES. No. 13. Argued Oct. 12, 1960. Decided Nov. 21, Mr. Donald S. Day, Buffalo, N.Y., for petitioners. I. Henry Kutz, Washington, D.C., respondent. Justice WHITTAKER delivered the opinion of Court. 1 Petitioners, who are executors estate Albert F. Meyer, brought this suit to recover an alleged overpayment federal taxes and District Court granted relief asked. 166 F.Supp. 629. The Appeals reversed, 275 F.2d 83, we executors' petition certiorari, 361 929, 80 373, 4 352, because a conflict decisions in circuits. Cf. In re Reilly's Estate, 239 797, decided by Third Circuit. 2 Two policies life insurance involved,1 but since they all material respects identical, need deal with only one them. policy obligated insurer pay death benefit $25,187.50, that sum was included tax return thereon paid. decedent had selected optional mode settlement which provided payment equal monthly installments his wife her life, 240 guaranteed, further if should die before receiving daughter would receive remainder them, both died commuted value those unpaid be paid last them die. 3 Of total proceeds determined $17,956.41 necessary fund payments wife, daughter, or survivor remaining $7,231.09 so long as she might live beyond months. Accordingly, made such entries on its books. Thereafter petitioners, executors, timely filed claim refund amount upon shown books actuarial expectancy months certain, theory insurer's treatment created separate 'property' payable alone, hence it qualified marital deduction under § 812(e)(1) Internal Revenue Code 1939, 26 U.S.C.A. 812(e) (1).2 denied, been sum. Petitioners correctly concede constitutes 'property,' within meaning statute,3 not qualify wife's interest 'terminable' one, statute, inasmuch may receipt guaranteed installments, event ones must go then living. They concede, too, $17,956.41, does same reasons. But contend that, although no provision therefor, bookkeeping constituted real division into, created, two 'properties'—one other $7,231.09—and latter qualifies statute is payable, at all, wife—during lifetime months—and person has any it. 6 Whether create several 'properties' funds, either terminable nonterminable both, decide, think here involved property, much balance daughter. Hence, terms policy, 'interest passing surviving spouse (may) terminate fail' 'person than (the) * possess enjoy (a) part property after termination failure spouse; *.' Therefore proceeds—considered apart from petitioners' into parts 'properties'—are disqualified express provisions 812(e)(1)(B) 1939. legislative history section supports compels conclusion. Illustrating applications rule, Senate Committee Report gave example relevant way distinguishable case,4 makes very clear allowable case annuity 'upon spouse, continue another (not through estate) undistributed 7 We argument—that properties—cannot withstand actual facts respecting proceeds, history. creation properties—one sufficient provide months, while lived period properties were fact created. allocations merely ones—mere entries—made own convenience insured, party contract, died. were, respectively, primary contingent beneficiaries alone. Neither title to, nor right receive, special fund, indeed none actually more measured their rights erasure entries—which free make time—would destroy rights. Their derive solely policy. It, entries, involved. Any action enforce against have information convenience. Nor exhaustion constitute defense beneficiary amounts due 8 (or appointee) alone events, obligation remained undischarged living or, not, It follows 9 Affirmed. 10 DOUGLAS, whom CLARK BRENNAN concur, dissenting. 11 companies; each 20 annual instalments decedent's Marion E. living, thereafter during lifetime. If death, full instalments, years, entitled like life. Decedent survived being 42 years old. 12 companies calculated sums designated years: $4,012.24 other. computed income 20-year period: policy; $1,007.36 13 (and did request) there segregation between computable term certain funding annuity.1 required years—$17,956.41 $4,012.24—were claimed deductions. This controversy concerns needed annuities wife—$7,231.09 plus $1,007.36, $8,238.45, deduction. 14 Concededly 'terminate Code,2 terminates. however, period. And seems me 'interest' contracts 812(e)(1)(B).3 15 taken out group period, former nondeductible, deduction.4 Does continuation types change result? Government maintains view entire single used statute; holds. Yet, deference, conclusion wide mark. 16 states interests include subject contingencies conditions.5 Yet these conditions all-inclusive. do transferee. And, I shall show, kind included. 17 Court, errs making decision turn whether statute. ruling statutory exist. Under question terminable; terminable. draws marked distinction 'interest.'6 Section 812(e)(1)(A) speaks property. spouse' will fail.' points concerned property—not disregarding scheme, looks finding denies 18 Plainly 'property.' A denied someone else S.Rep. 1013, 80th Cong., 2d Sess., Pt. 2, p. 8. examples: '* devises Blackacre son tenants common, allowed, spouse's interest.'7 19 There separation present case. These course, res. $21,968.65 representing $8,238.45 segregated companies' assets customer's checking account commercial bank. immaterial. Each represented chose action. be, could sue Only question. That 'interests' purposes implicit Report. Thus given him. 21 'The purchased contract determining gross estate. allowed respect contract. estate, portion thereof nevertheless interest. If, person, passed person.' Id., pp. 12—13. 22 sentence foregoing quotation, relies, describes accuracy decedent. relevancy concerned, viz., 23 My where accrues is, here, shared except even though hers qualify. One issued Northwestern Mutual Life Insurance Company John Hancock $5,019.60. provides part: '(1) Allowance '(A) General.—An passes extent '(B) Estate Other Terminable Interest.—Where, lapse time, occurrence contingency, contingency occur, fail, interest— '(i) (for less adequate consideration money money's worth) spouse); '(ii) reason heirs assigns) *'. distinct meanings. comprehensive sense includes objects susceptible ownership. refers ownership, quality quantum ownership particular property.' Part 4. 'Example (2). (Emphasis added.) said, oral argument maintained records accounts without funds. 812(e), I.R.C.1939, added Act 1948, 361, 62 Stat. 110, 117, See note supra. supra, noted purpose 'to nearly uniform married persons community non-community states.' page 799. taxable first taxed survivor. words, once either. 7. S.Rep.,

Category: 11