Court Opinion

ID: 9639411
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:16:41.710099+00
Date Added: 2024-06-11T18:10:17.841895
License: Public Domain

ANDEESON, Circuit Judge
(concurring).
In Judge WILSON’S opinion it is stated:
“The test, therefore, is whether the donor or decedent has reserved to himself control over the economic benefits or enjoyment of the trust property. If the economic benefits passed under the trust deed from the decedent’s control beyond recall, there can be no transfer tax.”
This grounds the power to tax on beneficial interest. In Hill v. Commissioner (C. C. A.) 38 F.(2d) 165, 168, and in Pope v. Commissioner (C. C. A.) 39 F.(2d) 420, 424, I unsuccessfully urged, as controlling, the same principle on my brethren, and wrote dissents. The Supreme Court, in 281 U. S. 761, 50 S. Ct. 460, 74 L. Ed. 1170, denied certiorari in the Hill Case. If and in so far (if at all) as such refusal to review may be held to warrant an inference of approval of the majority views in that case, my dissent is held wrong. But, in the absence of explicit holding by that court, that beneficial interest is not, in general, the test of taxability, I concur in reversing the decision below.
My doubt, as to the ultimate holding of the Supremo Court is increased by the expressions of that court in Tyler v. United States, 281 U. S. 497, 50 S. Ct. 356, 74 L. Ed. 991. In that case, it was ruled that property held by husband and wife by an estate in the entirety was taxable as a part of the deceased husband’s estate. The basis of the holding was that only the husband’s death gave the wife the power to hold the estate absolutely as her own, including the power of disposal; that his death was “the generating source” of important and definite accessions to her property rights.
So in the case at-bar: The rights of the beneficiaries under the trust were, until Mrs. Haynes’ death, absolutely subject to be changed or destroyed under the power reserved by her. She could do practically anything with that trust fund except apply its economic benefits to herself. Her death “ripened” their property rights. 281 U. S. 503, 50 S. Ct. 356, 74 L. Ed. 991.
If a power to alter and divert, absolutely divorced from economic benefits to the holder of the power, is not taxable, our decision is right. But I record my doubt as to what the Supreme Court will ultimately hold on that question.