Court Opinion

ID: 9651725
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:33:30.173987+00
Date Added: 2024-06-11T18:12:38.436246
License: Public Domain

CHASE, Circuit Judge
(dissenting).
While the trust income was, indeed, for the maintenance of the petitioner, her right to receive any of it was upon condition that she expend so much as might be needed for the support and maintenance of the children while they lived with her. The only exception was that the former husband should pay for emergency medical attention.
His legal obligation to support his minor children, unlike his legal obligation to support his wife, was not extinguished by the divorce decree; nor was the petitioner given the power in the trust instruments to determine the amount actually needed for the children’s support. Their father’s obligation to support them was, however, measured by their actual needs. Consequently, not only such part of the trust income as the petitioner determined was necessary to, and did expend for, the support of the children was taxable to the father but whatev*998er-part of such income might in fact be needed for that purpose. To that extent the father was relieved not of the obligation to pay for the support of the children but of the financial burden that might entail , whatever it might turn out to be. That all the trust income would be needed for the support of the children while they lived with the petitioner seems improbable but the existence of a possibility that it would be cannot with certainty be denied. The extent to which the settlor retained the right to have the trust income used to discharge obligations which remained his own and might otherwise have to be met with his own funds is the extent to which income remained his own for tax purposes. As such obligation must equal in terms of money the amount of the trust income, I think all of the latter is taxable to the father under the decision in Helvering v. Stuart, 317 U.S. 154, 63 S.Ct. 140, 87 L.Ed. 154.