Court Opinion

ID: 4481481
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:55.14727+00
Date Added: 2024-06-11T14:53:49.474048
License: Public Domain

DeeNNEN, J., dissenting: In my view the majority opinion becomes so unnecessarily enmeshed in the subtleties of New York law, the abstract meaning of individual words, and an effort to overrule and yet distinguish Estate of James Mead Vermilya, 41 T.C. 226, a rather recent court-reviewed opinion of this Court, that it ignores the clear intention of the testator as expressed in the joint will, and the obvious intent of 'Congress in providing for tire marital deduction. It appears obvious to me that if meaning is to be given to all of the words of the joint will, the first of the testators to die devised and bequeathed all of the residue and remainder of his estate to the survivor, to be the survivor’s “absolutely and forever,” and the survivor irrevocably devised and bequeathed the remainder of her estate unto their son. Of course, this would include any part of the estate of the first to die that was a part of the survivor’s estate at the time of her death. It is obvious that the principal object of the bounty of each of the testators was the other, and that in using the words “absolutely and forever” in paragraph B of the disposing paragraphs they intended to give the remainder of their estates to the other without limitation. It is prefectly consistent with such an interpretation of paragraph B that in paragraph C the survivor would will the remainder of her estate to their son. Paragraph C of the second clause in the will provides that upon the death of Mae, the remainder of her estate is given to the son — it says nothing about the remainder of Edward’s estate. Such an interpretation gives effect to all of the provisions of the will, whereas the majority view would really nullify the effect of the words “absolutely and forever.” I do not deny that Mae contracted to give the remainder of her estate, including any part of Edward’s estate which formed a part of her estate at the time of her death, to the son; and I need not dispute, to reach my conclusion, that this was a binding and enforceable contract. But what was the contract? It bound Mae to leave the remainder of her estate to the son. Edward gave nothing to the son under the second clause of the will, and that is the only clause that is relevant here. Section 2056(a) allows a deduction from the gross estate of an amount equal to the value of any interest in property which passes from the decedent to the surviving spouse, if that interest was included in decedent’s gross estate. The property passing to Mae from Edward’s estate clearly meets these requirements. But paragraph (b) puts a limitation on the deduction in the event the interest passing to the surviving spouse is a terminable interest. Subsection (b) (1) provides that where, on the lapse of time or the occurrence or failure to occur of an event or contingency an interest passing to the surviving spouse will terminate or fail, no deduction will be allowed with respect to such interest if (A) an interest in such property passes from the decedent to any other person. I fail to see how this limitation applies here. No interest in Edward’s property passing to Mae passed to the son from Edward under the second clause of the will. Even if, as the majority concludes, this second clause gave the son an enforceable right to require Mae to leave the remainder of her estate to him, this was 'an agreement on the part of Mae to leave the remainder of her estate to the son. Any interest in Edward’s property that passed to the son had to pass from Mae to the son, not from Edward, 'because the only contractual obligation was that Mae will the remainder of her estate to the son. One of the purposes of Congress in providing a marital deduction from the value of interests in property passing from one spouse to a surviving spouse and eventually on to a second beneficiary was to avoid a double estate tax on such transfers. In broad terms, if the property would become a part of the taxable estate of the surviving spouse and would be taxed in her estate in the event she retained it until death, the deduction is allowable to the estate of the first to die. However, if the interest passing to the surviving spouse is a type of interest that would not be includable in the survivor’s taxable estate, then a deduction is not allowed to the estate of the first to die. This assures taxation of the property passing from the two spouses once but not twice. Here, I do not believe anyone would claim, and the majority does not discuss it, that any part of Edward’s estate remaining in Mae’s possession at the time of her death would not be taxed as a part of her estate. To be consistent, the majority, in concluding that Mae’s interest was a terminable interest for purposes of the marital deduction in Edward’s estate, would have to agree that Mae took only a life estate with a limited power to consume during her life, in Edward’s property, and consequently any part of Edward’s estate that passed to the son on Mae’s death passed directly from Edward to the son and the transfer would not be taxable in Mae’s estate. If this purpose of Congress in allowing a marital deduction has any validity as a test of whether the marital deduction is allowable here, so that one is faced with a choice of allowing a marital deduction in Edward’s estate or not taxing the property in Mae’s estate, it seems obvious to me that both under the law and the entire language of the will, the choice should be in favor of allowing the marital deduction to Edward’s estate, which I would do here. Hoyt, /., agrees with this dissent.