Court Opinion

ID: 4612501
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:51:17.170499+00
Date Added: 2024-06-11T07:54:27.199040
License: Public Domain

MERCHANTS NATIONAL BANK, OF CEDAR RAPIDS, TRANSFEREE AND FIDUCIARY, BEING TRUSTEE UNDER FOUR CERTAIN TRUST AGREEMENTS EXECUTED BY ELMER A. HIGLEY FOR THE BENEFIT OF HELEN L. HIGLEY, HARVEY D. HIGLEY, FRED M. HIGLEY, AND HELEN E. HIGLEY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Merchants Nat'l Bank v. CommissionerDocket No. 78576.United States Board of Tax Appeals38 B.T.A. 1343; 1938 BTA LEXIS 751; December 8, 1938, Promulgated *751  Decedent died intestate in 1926.  There was no administration of his estate.  In 1922, when decedent was 65 years old and in good health, he transferred practically all of his property, consisting for the greater part of two office buildings, to a corporation in return for its capital stock, which he then transferred to four trusts which he established for the benefit of his wife and children.  After decedent's death, one of his sons, Fred M. Higley, made a Federal estate tax return in behalf of the widow and heirs of decedent, who were beneficiaries of these trusts.  Respondent determined a deficiency by reason of including in the gross estate the value of the property conveyed to the trusts, on the ground that they were transfers in contemplation of death, notice of the deficiency being sent to Fred M. Higley.  A petition was filed with this Board by Fred M. Higley, the other heirs, and widow of decedent.  In that proceeding it was held that there was no jurisdiction except as to Fred M. Higley, and as to him it was held that he was a transferee and liable for tax to the extent of the value of the property transferred to the trust of which he was beneficiary.  This holding was reversed*752  by the Circuit Court of Appeals in 69 Fed.(2d) 160. Thereupon, a deficiency was determined by respondent against the trustee of the four trusts and the trustee filed this petition.  Held, that the transfers by decedent to petitioner were not made in contemplation of death.  Dan Barnes, Esq., and Park Chamberlain, Esq., for the petitioner.  L. S. Pendleton, Esq., for the respondent.  KERN *1344  This proceeding arises on respondent's determination of a deficiency of $18,229.06 in Federal estate tax laid on the transfer of the estate of Elmer A. Higley.  Respondent has furthermore asserted against petitioner, as transferee of the assets of the decedent, a claim for additional tax in the amount of $4,557.27, or 25 per centum of the deficiency, imposed by section 3176 of the Revised Statutes, as amended by section 1003 of the Revenue Act of 1924, on the ground that no return was filed by petitioner until October 68 1934, over seven years after decedent's death.  The deficiency arises from respondent's determination that four several trusts created by decedent during his life, under which petitioner was appointed trustee and decedent's*753  wife and three children named beneficiaries, were created by decedent in contemplation of death.  Petitioner contends that the trusts were not created by decedent in contemplation of death, that no determination of the tax can be made against it as transferee until liability for the tax has first been established by a proper proceeding against the estate, and that in any event assessment and collection of the tax are now barred by the statute of limitations.  Petitioner also contends that the transfer of stock to the trust of which decedent's wife was beneficiary was "a bona fide sale for an adequate and full consideration in money or money's worth", since she surrendered her dower interest in decedent's property in consideration of this transfer.  This is not the first proceeding involving estate tax liability of this decedent.  Elmer A. Higley, the decedent, died on September 4, 1926, leaving a wife and three adult children.  There was no will and no administration of the estate.  On November 21, 1927, Fred M. Higley, decedent's son, made a return of Federal estate tax, purporting to act "in behalf of the widow and all the heirs at law of the said Elmer A. Higley, who are*754  the beneficiaries of the trusts which are set out in this report." Under "Schedule E, Transfers" he set out the four trust instruments by which the decedent on July 31, 1922, had made transfers of stock of a certain corporation sole created by petitioner in *1345  trust for the benefit of his wife and three children.  He also gave full information as to the circumstances of these transfers and stated that the value of the property so transferred was $465,398.85.  None of the property covered by these transfers was returned as belonging to the estate, the only property so returned being a small piece of land valued at $1,520.  The Commissioner thereupon determined a deficiency of $18,229.06, and on February 15, 1929, sent a notice of the deficiency to "Fred M. Higley, Beneficiary, Estate of Elmer A. Higley." On this notice a petition was filed with this Board, Docket No. 43630, on April 12, 1929, by the widow and three children.  We held in an unreported opinion, August 25, 1932, that since the notice of deficiency was addressed only to Fred M. Higley we had no jurisdiction over the widow and two other children but only over Fred M. Higley, and dismissed the petition as to the*755  others.  We found him a "transferee" under section 315(b) of the Revenue Act of 1926 and as such liable for the estate tax to the extent of the value of the property received by him, and, as the property received was in excess of the tax, for the full amount of the tax.  The petitioner took an appeal to the Circuit Court of Appeals for the Eighth Circuit on November 23, 1932, which reversed our decision on February 16, 1934, . The Circuit Court did not consider the question of contemplation of death, but based its reversal on the sole ground of the nonliability of Fred M. Higley as a transferee.  The court held that the beneficiary of an existing trust (the trust not being terminable within six years after decedent's death, during which period our decision was rendered) did not come within the meaning of "transferee" or "beneficiary", as used in section 315(b), and hence was not personally liable under that section.  It intimated clearly that a trustee would fall within the definition.  Pursuant to the court's mandate, we entered an order on March 30, 1934, that there was no liability on the part of Fred M. Higley for Federal estate tax laid on the transfer*756  of Elmer A. Higley's estate.  On October 6, 1934, the return in the present proceeding was filed by the petitioner as trustee under the several trusts.  On November 23, 1934, the respondent asserted a deficiency of $18,229.06, with a penalty of $4,557.27 for failure to file a return within the time prescribed by law, against the petitioner as transferee of assets of Higley's estate.  In reaching this determination the respondent included in the gross estate the corpus of the four trusts as having been transferred in contemplation of death in the sum of $614,046.48.  This was the valuation used by the respondent in the earlier proceeding against Fred M. Higley, and was not contested then, nor is it here, by the petitioner.  No part of the deficiency has ever been paid, and *1346  it is obvious from the facts stated, a matter not in dispute here, that the estate had insufficient property to pay the tax.  Elmer A. Higley, who will hereinafter be referred to as the decedent, died intestate, a resident of Cedar Rapids, Linn County, Iowa, September 4, 1926, being at the time aged 69 years, 9 months, and 15 days.  He left surviving him as his widow, Helen L. Higley, and as his children*757  and heirs at law, Harvey D. Higley, Fred M. Higley, and Helen E. Higley.  The wife and children, the petitioners herein, are all residents of Cedar Rapids, Linn County, Iowa.  There has never been any probate of the estate of Elmer A. Higley.  Prior to 1922 decedent had large interests in real estate in Cedar Rapids, Iowa, including the Higley Building and the Granby Building, which were office buildings, a residence, and numerous building lots.  When decedent's father died he had left considerable real property in Cedar Rapids, which included the lots upon which the Granby Building and the Higley Building were located.  Upon the death of decedent's father, decedent's brothers had demanded their money immediately, and to satisfy their demands the best part of the property had been sold at very low prices, causing considerable loss to them.  Decedent had been forced to buy it in or lose his interest in it and this had placed a burden on him.  Decedent retained his interest in this property and it enhanced in value greatly.  Decedent wished among other things to transfer his property to the members of his own family during his life in such a way as to avoid such difficulties among*758  them at his death.  The major properties, the Granby Building and the Higley Building, could not be divided in kind.  The decedent conceived the idea that, if he transferred his property to a corporation and gave the stock to his family, no one of the family could force a sale of the property itself and that by this means he could also accomplish an equitable distribution.  Being keenly interested in the success of these buildings, he was also concerned with the importance of paying the indebtedness which constituted a lien against them.  He also wished to encourage his children to take an interest in them and to realize the importance of their management, especially his son, Fred M. Higley.  It was also his wish to provide for the payment of some of the income from the buildings to his children as soon as the indebtedness was reduced to a safe figure.  However, he wished to accomplish these things in a way that would continue his management of the properties during his life.  The advisability of organizing such a corporation had been considered by the decedent for several *1347  years prior to 1922.  The transfers of property involved in this proceeding were made by decedent*759  in order to accomplish these objectives.  He had no intention to evade estate taxes.  Decedent knew that even if he organized a corporation and gave the stock to his family any member of the family could still dissipate his individual interest, so he conceived the idea of establishing trusts.  On or about July 1, 1922, the decedent formed a corporation under the laws of the State of Iowa, known as Elmer A. Higley, Inc., with authorized capital stock of $225,000 divided into 2,250 shares of common stock of the par value of $100 a share.  This corporation will hereinafter, for convenience, be referred to as "the corporation." Article VI of the articles of incorporation provided in part as follows: The affairs of this corporation shall be managed by Elmer A. Higley who shall be the sole officer and director of such corporation and shall perform all the duties ordinarily performed by the President, Vice-President, Secretary, Treasurer and the Board of Directors of such corporation.  He shall hold office until such time as these articles shall be amended and provision made for the election of a full set of officers and directors for said corporation.  The decedent acquired all the*760  capital stock of the corporation for cash which he had borrowed from a bank for that purpose.  The corporation then paid back to the decedent all the cash which he had paid in, and decedent, by a warranty deed dated June 29, 1922, conveyed to the corporation the Higley Building, the Granby Building, a leasehold interest in a part of the property upon which the Higley Building was built, and some outlying lots which decedent owned.  Some of these lots decedent had previously contracted to sell, and the transfer of the lots to the corporation was subject to the rights of the persons with whom the decedent had made these contracts of sale.  At that time decedent's homestead was also assigned to the corporation, but the household goods were not transferred since they belonged to decedent's wife.  The realty transferred to the corporation constituted all of decedent's real property except lot 9 of block Hillcrest, Cedar Rapids, Iowa.  That lot was adjacent to property of decedent's son Fred M. Higley, and decedent had often expressed his intention of giving that lot to Fred.  Decedent also transferred his bank account to the corporation at the time the corporation was organized.  There*761  was also transferred by decedent to the corporation at about the same time the decedent's interest in a contract made in 1917 with the Farmers Insurance Co., whereby decedent, upon consideration of his allowing that company to occupy the eighth floor of the Higley Building for a term of ten years, was to receive, at the expiration of the ten-year period, title to the Farmers Insurance Building.  *1348  At the time of the above transfers decedent did not have much personal property, and the assets transferred to the corporation constituted substantially all of his property.  At that time he did own a Chandler touring car which was not transferred to the corporation.  With the money received from the corporation for this property he repaid the bank the money borrowed for the purpose of acquiring the stock.  Later, on August 3, 1926, decedent transferred to the corporation 46 shares of Fidelity Realty Co. stock and 38 1/2 shares of Cedar Rapids Hotel Co. stock.  The decedent's wife, Helen L. Higley, signed the warranty deed of June 29, 1922, transferring decedent's property to the corporation.  Decedent and his wife were happily married and decedent did not want to deprive*762  her of the property she was entitled to receive.  He told her that she would receive in lieu of her dower rights 750 shares of stock in the corporation.  The Granby Building had been built in 1893 by decedent, his brother, and his mother.  Decedent acquired the entire ownership of the building in 1906 and 1908 by purchase and inheritance.  The Higley Building was built in 1917 to 1919.  The two buildings are so connected that they must be operated together.  There is one heating plant, one pumping plant and one air system for both buildings.  On July 1, 1922, there was a bond issue outstanding against the Higley Building in the amount of $90,000.  At that time there was a mortgage on the Granby Building owing to the Northwestern Mutual Life Insurance Co. in the amount of $70,000.  The bonds on the Higley Building matured in the amount of $5,000 each year.  The decedent also borrowed money on unsecured notes to finance the construction of the Higley Building.  At the time the corporation was organized these notes amounted to $6,423.96.  On July 31, 1922, the decedent, by four separate written trusts, transferred all of the stock of the corporation, except one share, to the Merchants*763  National Bank of Cedar Rapids, Iowa, as trustee.  In the trust designated "Trust for Helen L. Higley", to which he transferred 749 shares, it was directed that the entire net income should be paid to Helen L. Higley in monthly installments as long as the trust should continue.  The provisions with reference to the duration of the trust are as follows: Subject to the provisions that this Trust shall, in all events, terminate at the death of the Beneficiary, this Trust shall continue for at least six years following the date of the death of Settlor.  If, however, at the expiration of six years from the date of the death of Settlor, or at any time thereafter, the Reneficiary shall in writing notify the Trustee of her election to terminate the Trust, then the same shall be terminated.  *1349  At the termination of the Trust the property therein shall be distributed forthwith to the Beneficiary or, if she shall not be living to such person as she may designate by will; or, if she shall have died intestate then it shall be distributed under the laws of distribution of the state wherein she shall have last resided.  On January 19, 1927, there was issued by the corporation to*764  Helen L. Higley a certificate for one share of stock, and the certificate for one share which decedent had retained was canceled.  In the trust designated "Trust for Major Harvey D. Higley", to which he transferred 500 shares, it was directed that the net income to the extent of $2,400 per year should be paid to Harvey D. Higley from the date the trust was created until six years from the death of the settlor and that thereafter the entire net income should be paid to him as long as the trust should continue.  It was further provided that if the income of the trust should not amount to as much as $2,400 in any year prior to six years after the death of the settlor, the beneficiary should not receive in such year more than the amount of the income in that year.  The provisions with reference to the duration of this trust are as follows: This trust shall continue for at least six years following the date of the death of Settlor and until terminated as in this article provided.  If at the expiration of six years from the date of the death of Settlor or at any time thereafter, the Beneficiary shall be deceased, or if living shall, in writing, notify the Trustee of his election to terminate*765  the Trust then the same shall be terminated.  At the termination of the Trust the property therein shall be distributed forthwith to the Beneficiary or if he shall not be living to such persons as he may designate by will or if he shall have died intestate then it shall be distributed under the laws of distribution of the state wherein he shall have last resided.  In the trust designated "Trust for Helen E. Higley", to which he transferred 500 shares, the provisions with reference to the payment of income are the same as those contained in the Harvey D. Higley trust.  The provisions with reference to the duration of this trust are as follows: This Trust shall continue as to one-half of the property therein during the life of Beneficiary and as to the remainder for at least six years following the date of the death of Settlor and until terminated as in this article provided.  If at the expiration of six years from the date of the death of Settlor the Beneficiary shall be deceased the entire Trust shall be terminated; or, if living, if the Beneficiary shall in writing notify the Trustee of her election to terminate the Trust, then as to the one-half of the property therein the*766  Trust shall be terminated.  If the Trust be terminated by the death of Beneficiary all the property therein remaining shall be distributed to such persons as she may designate by will or if she shall have died intestate then it shall be distributed under the laws of distribution of the state wherein she shall have last resided.  If the Trust shall be terminated as to the one-half of said property as in this article provided, then the one-half of said property shall be forthwith delivered to Beneficiary to be hers absolutely and forever.  *1350  In the trust designated "Trust for Fred M. Higley", to which he transferred 500 shares, the provisions with reference both to payment of income and duration are the same as those contained in the Harvey D. Higley trust hereinbefore mentioned.  Each of the above trusts contains the following provisions: Section 3.  During the life of Settlor [the trustee], it shall at each stockholders' meeting of the corporation at which officers and directors are elected cause such stock to be voted for Settlor herein as sole director and officer of such corporation, which office he holds at the time of the settlement of this Trust.  If Settlor*767  shall have become unable to act in the capacity of director and officer of said corporation, either through mental or physical disability then such stock shall be voted in favor of Helen L. Higley as sole director and officer of said corporation.  At the first annual meeting after the death of Helen L. Higley, or after she shall have become incapacitated or shall have declined to act, Trustee shall vote the stock in favor of an amendment to the Articles of Incorporation providing for a full set of officers to be elected by the Board of Directors and a sufficient number of directors to permit each of my surviving children and Helen L. Higley, my wife, (if she is able and so desires) to become members of such Board.  Upon the adoption of such amendment it shall vote such stock in favor of each of my said children and Helen L. Higley (if she is able and so desires) as members of said Board.  * * * "The Income of the Trust Fund" as herein used is defined to be all money arising as dividends from shares of stock or other securities belonging to said Trust Fund.  "The Net Income of the Trust Fund" is defined to be that portion of the gross income of the Trust Fund which remains, in*768  Trustee's hands after all expenses and charges of administering the Trust, as herein provided for, have been paid, or money has been set aside and provided for the payment thereof, out of said gross income.  * * * In the conduct and administration of the Trust, the Settlor, or the Beneficiary, as the case may be, shall have power and authority to employ attorneys, solicitors, counsel, accountants, clerks, employees, brokers and salesmen; and Trustee shall pay out of the Trust Fund as part of the operating expenses thereof, for the services of such attorneys, solicitors, counsel, accountants, clerks, employees, brokers and salesmen, such compensation as the Settlor, or the Beneficiary as the case may be, shall deem reasonable and advisable.  Each trust contained a provision that the settlor might during his lifetime change the trustee and that after his death Helen L. Higley might change the trustee.  Each of the trusts for the children also provided that, after the death of settlor and Helen L. Higley, all the surviving children of settlor might by joint action remove the trustee and appoint a new one.  In none of the trust instruments did decedent reserve a power to revoke*769  the trust.  Decedent's plan was to get the debts on his property paid or substantially paid before any large distributions of income were made.  It had been decedent's habit throughout his life to pay his debts as *1351  rapidly as possible.  The financial situation was not good in 1921 and 1922 and decedent was somewhat concerned about the indebtedness.  Decedent figured that it would take at least six years to pay off the indebtedness against the property, and that was his reason for putting in the trust instruments the provision that the trusts should continue until six years after his death.  He wanted the trusts to continue long enough for the indebtedness to be paid off and long enough for his family to determine whether they desired to sell their interests.  The indebtedness was rapidly reduced, but no dividends were paid until the latter part of September 1926, after the death of the decedent.  Thereafter dividends were paid monthly.  At the date of decedent's death the indebtedness had been reduced to $31,000 on the Higley Building, and to $45,000 on the Granby Building.  The total indebtedness on all the property amounted to $86,367.54 at September 4, 1926, the date*770  of the death of decedent.  After the death of decedent, insurance on his life payable to the corporation was used to reduce the indebtedness.  This amounted to $13,328.86, including interest.  Of this amount $10,204.80 was paid by the Northwestern Mutual Life Insurance Co. under policy No. 512202, which was issued on April 1, 1902, in the principal amount of $10,000 for the benefit of the decedent himself but was assigned by the decedent on July 17, 1922, to the corporation.  The remaining portion of the $13,328.86, or $3,024.06, was paid by the Mutual Benefit Life Insurance Co. under policy No. 510428.  That policy had been issued for the sum of $10,000 on the life of decedent on June 22, 1909, the proceeds of such policy being payable to the executors, administrators, or assigns of the insured.  Under date of January 16, 1925, at the request of the insured, the policy was made payable to a number of assignees, one of which was the corporation, Elmer A. Higley, Inc., which was to receive three-tenths of such proceeds.  Policy No. 122599, in the amount of $5,000, was issued on the life of decedent by the Northwestern Mutual Life Insurance Co. on September 18, 1883, for the benefit*771  of the decedent himself.  By an endorsement on that policy dated August 4, 1922, the beneficiary was changed to Helen L. Higley, decedent's wife, to whom the proceeds were paid.  After the formation of the trust in his favor, Fred M. Higley, son of decedent, had better credit facilities than he had previously enjoyed.  From the date the corporation was organized until decedent's death, decedent received a salary of $800 per month from the corporation.  Until the time of his last illness, decedent had been actively engaged in his business.  He had an optimistic disposition.  He had *1352  spent much of his life out of doors, walking and working in his garden.  He lived about a mile and a quarter from his business, and, with few exceptions up to the time of his last illness, walked to and from his office each day, often going in a roundabout way for the exercise.  Ever since decedent was a young man he had had an atrophy of the muscles of his right arm.  It interfered with the use of his right hand, and decedent was sensitive about the appearance of his arm.  Decedent had consulted Dr. Van Epps of Iowa City about his arm and he had also been to the Mayo Clinic of Rochester*772  twice in regard to it.  He told Dr. Barclay J. Moon about such consultations in 1925.  He also told Dr. Moon that he had had little success in finding out the exact nature of the condition of his arm.  In this connection decedent had also visited the University Hospital of Iowa City and Johns Hopkins in Baltimore, and had also consulted doctors in Europe when he was abroad on two occasions in the several years prior to his death.  It was not a progressive ailment, and medical men advised him that it would in no way hasten or contribute to his death.  There had been no great change in the condition of his arm in the 10 or 15 years just prior to his death.  However, decedent always had the hope that someone could help this condition.  Decedent also had chronic catarrh, and Dr. Ray Keech often gave him an ointment to use.  At various times decedent consulted this doctor for physical examinations.  He told this doctor that it was his habit to have regular physical examinations, and the doctor found that his general physical condition, except for the right arm, was good.  From 1908 to 1923 Dr. Keech gave decedent, at decedent's request, physical examinations every six or eight months. *773  In December 1925 decedent went to the office of Dr. Moon and took four hypodermics of cold serums.  He had taken cold serums before.  Decedent also had some sinus trouble.  Dr. Wayne J. Foster began treating decedent for sinus trouble in 1921 and these treatments continued until 1924, when Dr. Foster operated upon him for this trouble.  This was a minor operation and decedent was completely recovered from it in a few days.  This operation did not confine him to his home.  Decedent was partly deaf in each ear, more so in the right ear.  In 1917 and 1918, when he built the Higley Building, which was an eight-story office building, decedent personally superintended the construction.  He daily climbed ladders up the elevator shafts to the various floors and watched every part of the work.  Up to the time of his last illness he made all the leases with his tenants, visited practically every part of his properties every day, and was in daily contact with his tenants.  For several years prior to decedent's death *1353  there were about 240 tenants in the Granby and Higley Buildings.  In the 15 years immediately prior to the time of his last illness he had had no illness which*774  had confined him to his bed or kept him away from his business.  The principal cause of the decedent's death was acute bronchitis and the secondary causes were oedema of the lungs and dilation of the heart.  His final illness was contracted late in August of 1926 in the form of bronchitis.  For eight days he remained at home, and his cough gradually grew worse.  A physician was called but his condition was not considered at all serious until about three o'clock of the afternoon of the day of his death, September 4, 1926, when his lungs began to fill.  The infection was so rapid that death occurred at eight o'clock that evening.  Prior to his death decedent had purchased a new Ford sedan and had planned to spend the winter of 1926-1927 in California with his wife and daughter.  At the date of his death decedent owned that car, of the value of about $600, and a Cadillac car of the value of about $500 or $600.  The transfers of property made by decedent and involved herein were not made by him in contemplation of death.  OPINION.  KERN: The primary issue presented in this proceeding is whether the transfers of property made by the decedent Elmer A. Higley some four years prior*775  to his death on September 4, 1926, were made by him in contemplation of death and whether, therefore, as respondent contends, the property was includable in his gross estate pursuant to the provisions of section 302(c) of the Revenue Act of 1926, set out in the margin. 1*776  At the time the transfers were made decedent was 65 years old and he was, and had always been, in good general health.  While he *1354  suffered from an atrophied arm and a slight deafness, and had, on occasion been treated for catarrh, colds, and a sinus infection, he had been remarkably free from organic illness throughout his life.  Not only was he in good general health, but he was also a man of cheerful disposition, engrossed in his work, and greatly interested in the office buildings which he had acquired or constructed and in their management.  He did not think or have reason to think that his death was imminent or would occur in the reasonably near future.  In making the transfers involved in this proceeding he regarded his death as a remote contingency, but one to be guarded against.  Decedent made the transfers of his property to the corporation and established the trusts which ultimately held its stock for several reasons.  He was keenly interested in the success of his office buildings and was deeply concerned with the importance of lessening the indebtedness which constituted a lien on them.  He was anxious that his children should take an interest in them and*777  was especially anxious to interest his son, Fred M. Higley, in their management.  He desired in the event of his death to obviate the necessity of selling the buildings in order to settle his estate, having had difficulties himself along this line on the occasion of the death of his father.  He wished to provide for the payment of some of the income from the buildings to his children as soon as the indebtedness against the buildings was reduced to a figure which he considered safe.  At the same time he was determined to maintain control over the operation of these properties during his lifetime and he provided for this and also for compensation to him for his services.  The plan which was worked out during the years immediately prior to the transfers and was accomplished by them effected purposes connected with life and not with death.  The plan, it is true, was intended to make provision for his family in the event of his death, but it was also designed, regardless of the disposition of the properties, to protect them during the remainder of his life, as well as after his death.  He had no purpose of evading estate taxes in making these transfers.  *778  Under these circumstances it is our opinion that the transfers were not made in contemplation of death.  ; ; . It is, therefore, unnecessary to discuss the other issues presented.  The 25 per centum additional tax claimed falls, of course, with the deficiency.  Reviewed by the Board.  Decision will be entered for the petitioner.DISNEY dissents.  TURNER *1355  TURNER, dissenting: Because of difficulties experienced in the distribution of his father's estate, the decedent above all desired to control the division of his property at death and in my opinion that desire and intent to so control the division of his property at death was the dominant motive for the transfer by the decedent of all of his property to Elmer A. Higley, Inc., and the subsequent transfer of the stock of that corporation to the Merchants National Bank of Cedar Rapids, as trustee.  Matters pertaining to life were of secondary importance.  The usual argument is advanced that the*779  decedent made the transfers to trust in order that his son, in this case Fred M. Higley, might gain experience during the lifetime of his father in the management of the office buildings and properties.  It is to be noted, however, that the decedent very carefully and definitely avoided and refrained from placing any responsibility upon and from delegating any authority to Fred M. Higley during his lifetime by making a specific provision that he, the decedent, should be the sole officer and director of the corporation during his lifetime and in the event he should become incapacitated the decedent's wife should become the sole officer and director.  It was only after the death of both the decedent and his wife, or until his wife should become incapacitated or should decline to act, that Fred M. Higley or any of decedent's children should have any voice in the management of the properties.  I respectfully disagree with the conclusion of the majority that the transfers in question were not made in contemplation of death.  OPPER agrees with this dissent.  Footnotes1. SEC. 302.  The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated - * * * (c) To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, except in case of a bona fide sale for an adequate and full consideration in money or money's worth.  Where within two years prior to his death but after the enactment of this Act and without such a consideration the decedent has made a transfer or transfers, by trust or otherwise, of any of his property, or an interest therein, not admitted or shown to have been made in contemplation of or intended to take effect in possession or enjoyment at or after his death, and the value or aggregate value, at the time of such death, of the property or interest so transferred to any one person is in excess of $5,000, then, to the extent of such excess, such transfer or transfers shall be deemed and held to have been made in contemplation of death within the meaning of this title.  Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death but prior to the enactment of this Act, without such consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title. ↩