Court Opinion

ID: 4481346
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:50.76668+00
Date Added: 2024-06-11T14:54:00.624251
License: Public Domain

Raum, J., dissenting: I cannot agree with the result reached as to the second issue. The decedent reserved to himself, as trustee, the power to distribute principal to the income beneficiary whenever it should appear to his “satisfaction” that such beneficiary may be “in need of funds” (in excess of income otherwise then available to him) for a variety of purposes including his “welfare and happiness.” In my judgment the word “happiness” is of such broad scope as to leave the grantor with virtually unfettered power to distribute principal to the income beneficiary at will. I think that the Court’s attempt to read a restrictive meaning into the word “happiness” is unfounded, and that its decision in this respect is contrary to Merchants Bank v. Commissioner, 320 U.S. 256, and Henslee v. Union Planters Bank, 335 U.S. 595. It is inconceivable to me that a New York court would undertake to limit the grantor in his exercise of the sweeping power thus reserved to himself, and I do not read any of the New York cases cited in the majority opinion as confining that power within measurable standards. The fact that the income beneficiary is also the remainderman, if he should survive, is immaterial, for the power to accelerate enjoyment, with the effect of cutting off contingencies and making certain that the income beneficiary will obtain the enjoyment of the distributed funds, is sufficient to bring the statutory provisions into play. Commissioner v. Estate of Holmes, 326 U.S. 480. Scott, Hour, Tanneuwald, and IrwiN, JJ., agree with this dissent.