Legal Document

346 U.S. 335 74 Supreme Court Reporter 98 L.Ed. 15 LOBER et al.v.UNITED STATES. Number 30. Argued Oct. 16, 1953. Decided Nov. 9, Mr. David Stock, New York City, for petitioners. Charles K. Rice, respondent. Mr Justice BLACK delivered the opinion of Court. 1 This is an action estate tax refund brought by executors Morris Lober. In 1924 he signed instrument conveying to himself as trustee money and stocks benefit his young son. 1929 executed two other instruments, one a daughter, second The terms these three instruments were same. Lober was handle funds, invest reinvest them deemed proper. He could accumulate income with same freedom until children reached twenty-one years age. When they be paid accumulated income. hold principal each trust beneficiary twenty-five. case died wife broad powers had conveyed himself. trusts declared irrevocable, reaches us we may assume that gave Lober's 'vested interest' under state law, so if after creation their interests would have passed estates. A crucial term at any time saw fit turn all or part over children. Thus will reduce pay it beneficiaries, thereby terminating trusteeship it. 2 in 1942. By property valued more than $125,000. Internal Revenue Commissioner treated this included gross estate. That inclusion lawsuit. relied on § 811(d)(2) Code, 26 United States Code KF62 811 (1946 ed.), Annotated KF65 U5 811. section, far material here, required decedent's value decedent previously transferred 'where enjoyment thereof subject date death change through exercise power * alter, amend, revoke *.' versus Holmes' Estate, 326 480, 66 257, 261, 90 228, held terminate equivalent 'alter, revoke' it, approved taxation Holmes basis. Relying case, Claims upheld properties 108 F.Supp. 731, 124 Ct.Cl. 44. done despite assumption conveyances indefeasible conveyed. Fifth Circuit Appeals contrary result where circumstances substantially same, Hays' Estate Revenue, 5 Cir., 181 Federal Reporter, 2nd Series 169, 172—174. Because conflict, granted certiorari. 345 969, 73 1111. 3 Petitioners stress factual difference between case. provided before expiration succeeded interest, but without children, interest pass brothers eliminate contingency might prevented passage beneficiary's heirs. Here upon beneficiaries would, But cannot agree should result. 4 We pointed out concerned 'present economic benefit' 'technical vesting title estates.' And like no right immediate either principal.' here none full 'enjoyment' property, whether 'bested' not. To get wait age twenty-five unless father sooner kept very death. given reserving gift wholly effective, did What said fits situation too: 'A donor who keeps strong actual what puts beyond own retake has not divested degree control which requires order avoid tax.' Holmes, supra, page 487, 260. Affirmed. 6 DOUGLAS JACKSON dissent.

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