Court Opinion

ID: 2962436
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:57:46.978745+00
Date Added: 2024-06-11T11:42:29.714473
License: Public Domain

USCA1 Opinion

	

                             UNITED STATES COURT OF APPEALS                                 FOR THE FIRST CIRCUIT                                  ____________________          No. 93-1602                      ESTATE OF ELIZABETH G. HUNTINGTON, DECEASED,                           NANCY H. BRUNSON, ADMINISTRATRIX,                                 Petitioner, Appellant,                                           v.                           COMMISSIONER OF INTERNAL REVENUE,                                 Respondent, Appellee.                                  ____________________                        APPEAL FROM THE UNITED STATES TAX COURT                        [Hon. Stephen J. Swift, U.S. Tax Judge]                                                ______________                                  ____________________                                         Before                                  Selya, Circuit Judge,                                         _____________                             Coffin, Senior Circuit Judge,                                     ____________________                                and Cyr, Circuit Judge.                                         _____________                                  ____________________            Michael E. Chubrich for appellant.            ___________________            Annette M.  Wietecha, with whom Gary  R. Allen, Ann B. Durney, and            ____________________            ______________  _____________          Michael L.  Paup, Acting Assistant  Attorney General,  were on brief          ________________          for appellee.                                  ____________________                                   February 23, 1994                                  ____________________               COFFIN,  Senior Circuit Judge.  Charles and Myles Huntington                        ____________________          claim that their stepmother, the  decedent, promised as part of a          reciprocal will agreement with their father that she would devise          her  estate  in  equal  shares  to  them  and  their  stepsister.          Decedent died intestate, leaving the sons without an inheritance.          Their  claim  against her  estate  ultimately led  to  a $425,000          settlement.   The question  posed by this  appeal is  whether the          estate  may deduct  the  settlement amount  for  purposes of  the          federal estate tax.   The answer depends upon  whether the mutual          will agreement was "contracted bona  fide and for an adequate and          full consideration in money or  money's worth," as required by 26          U.S.C.   2053(c)(1)(A).1   After careful review of  the facts and          precedent, we affirm the Tax Court's determination that the claim          is not deductible.                                        ____________________               1 Section 2053 provides in relevant part:                    (a) General rule.--For purposes of the tax imposed                        ____________               by section  2001, the value of the taxable estate shall               be determined by deducting from  the value of the gross               estate such amounts--                    * * *                    (3) for  claims against the  estate, . . .  as are               allowable by the  laws of the jurisdiction .  . . under               which the estate is being administered.                    * * *                    (c) Limitations.--                        ___________                    (1) Limitations applicable to subsections (a)                        _________________________________________                    and (b).--                    _______                    (A)  Consideration   for  claims.--The   deduction                         ___________________________               allowed  by this section in the  case of claims against               the estate .  . . shall,  when founded on a  promise or               agreement,  be limited  to the  extent  that they  were               contracted  bona  fide  and for  an  adequate  and full               consideration in money or money's worth . . . .                                         -2-                                         -3-                                I. Factual Background                                   __________________               The decedent, Elizabeth Huntington, married Dana  Huntington          on October 15,  1955.   At that  time, Dana's two  sons from  his          previous  marriage, Charles and Myles, were, respectively, 30 and          28 years old.  Elizabeth and Dana had one daughter, Nancy.               On January 3, 1978, Dana executed a will in which he devised          to  Nancy, Charles and Myles $25,000 each.   The remainder of his          estate would be held in trust for the  benefit of Elizabeth, and,          upon her death, the trust would terminate and the corpus would be          distributed in equal shares to the three children.  This will was          revoked by Dana on May 8, 1979, when, during the illness that led          to his death, he executed a new will.  The later will stated that          Dana intentionally was making no provision for Charles, Myles and          Nancy.   Instead,  Dana devised  his entire estate  to Elizabeth.          Dana  died  on April  6,  1980, and  his  May 8,  1979,  will was          admitted to probate.               Charles and  Myles maintain  that their  father changed  his          will in  1979 to  give everything to  Elizabeth only  because she          agreed  to execute  a will  devising  her estate  in three  equal          shares  to  Nancy, Charles  and  Myles.    They point  to  Dana's          previous  will to demonstrate his  intent to make direct bequests          to his sons, and they refer to conversations through the years in          which Dana acknowledged  a moral obligation to leave  part of his          estate  to his  sons in  order to  compensate for  the inadequate          divorce settlement their mother received.                                         -4-               They also offer direct evidence  of an agreement between the          couple.    Dana's  attorney, William  Beckett,  testified  in his          deposition that, shortly  before execution of the 1979 will, Dana          and Elizabeth discussed the arrangement in which Dana would leave          everything to her and  she shortly would draft a will  that would          include Charles  and Myles.   Also in a deposition,  Myles's wife          testified that  at  the  family  luncheon  immediately  following          Dana's funeral, Elizabeth told her that "`Dana left everything to          me,' meaning herself, with the understanding that upon her death,          everything would  be divided equally between  the boys . .  . and          Nancy . . . ."  See App. at 133.                          ___               Charles and Myles  initially attempted to challenge  the May          8, 1979 will based on their father's alleged mental incompetence.          They dropped  that lawsuit,2 and  on September 10, 1981,  filed a          petition  in Rockingham County  (N.H.) Superior Court  seeking to          impose a  constructive trust on  all of the property  received by          Elizabeth from Dana's estate and on all of the property owned  by          the decedent on and  after May 8, 1979, the date  of Dana's final          will.   They alleged  that Dana and  decedent had  made a binding          oral  agreement to execute  reciprocal wills, and  that Elizabeth          had not yet executed a will in compliance with the agreement.               On November 12, 1981, the superior court  issued a temporary          restraining  order barring Elizabeth  from taking any  actions to          encumber or transfer the property.  Five years later, on December                                        ____________________               2 They abandoned  this effort because  of the difficulty  of          proving that  the will  was the product  of undue  influence, see                                                                        ___          Deposition of Myles Huntington, May 16, 1986, at 27.                                           -5-          10, 1986, Elizabeth,  Charles and Myles settled  the constructive          trust  lawsuit.   The settlement  provided  that Elizabeth  would          execute a will in which she would devise 20 percent of her estate          to each of  Dana's sons.  Two  weeks later, however,  on December          24, 1986,  Elizabeth died intestate.   Charles and Myles  filed a          notice of claim against her estate  and, subsequently, they filed          a lawsuit to enforce the settlement terms.               Charles,   Myles,  and   their  stepsister,   Nancy   --  as          administratrix of her  mother's estate -- eventually  settled the          lawsuit brought to enforce the  terms of the earlier constructive          trust  settlement.  Under the second  settlement, Nancy agreed to          pay  to  Charles  and  Myles  a  total  of  $425,000,  an  amount          representing 40 percent of Elizabeth's  estate.  Nancy made  that          payment on April 14, 1989.               On   the  federal  tax  return  for  Elizabeth's  estate,  a          deduction was taken  for the settlement payment based  on section          2053(a)(3)  of the Internal Revenue Code, which allows deductions          for  "claims against the  estate."3  The  Commissioner disallowed          the deduction,  and calculated  a deficiency  of $117,067  in the          estate tax.4                                        ____________________               3 The estate return was  filed before the settlement reached          among Charles, Myles and Nancy and the amount originally deducted          was $350,000.  The estate later claimed a deduction for the  full          amount of the $425,000 payment.               4 Both the Tax Court opinion and the Commissioner's brief on          appeal state that the Commissioner rejected the deduction  on the          ground that  the payment  was a  testamentary disposition  rather          than a  claim against  the estate within  the meaning  of section          2053(a).  The Commissioner's Notice of Deficiency did not specify          the basis of the rejection.  See App. at 73.                                       ___                                         -6-               The  Tax  Court  affirmed.    It  found  that  the  asserted          reciprocal  will  agreement  between Dana  and  Elizabeth  lacked          adequate  consideration to support a "claim[] against the estate"          within the meaning of section 2053.  The court concluded that the          only consideration  underlying  the agreement  was  the  couple's          "donative   intent,"   making   the   agreement  a   testamentary          arrangement rather than  an arms-length deal providing  the basis          for a deduction.  The  court further held that the lawsuit  filed          by  Charles  and Myles  to  enforce the  alleged  reciprocal will          agreement did not change the essence of the sons' claim so  as to          render their claim deductible.                On  appeal,  the  estate  argues  that   Elizabeth  received          substantial  consideration in exchange for her promise to provide          for Charles and  Myles in her will -- the excess amount over what          she would  have received  under Dana's revoked  1978 will  -- and          that  this consideration made  the sons' claim  fully enforceable          and deductible.  In addition,  the estate contends that Elizabeth          also  received valuable consideration when she agreed in December          1986 to settle  the constructive trust lawsuit.   In exchange for          her  promise to  execute  a will  in  which she  would  devise 40          percent of her estate to Charles and Myles, her stepsons released          their claim  to two-thirds  of her estate.   The  estate contends          that either  or both  of these  considerations  is sufficient  to          support its claim to a deduction under section 2053.               As  there is no  material dispute concerning  the underlying          facts,  our task  is to  determine solely  whether the  Tax Court                                         -7-          properly applied the statute in  these circumstances.  Our review          therefore is de novo. See LeBlanc  v. B.G.T. Corp., 992 F.2d 394,                       __ ____  ___ _______     ____________          396 (1st Cir. 1993).                                           II.                At the risk of stating the obvious, we think it worth noting          at the  outset that  any analysis of  estate tax  issues must  be          sensitive  to "the general polic[y] of taxing the transmission of          wealth  at death,"  United States  v.  Stapf, 375  U.S. 118,  134                              _____________      _____          (1963).  Section 2053 of  the Internal Revenue Code, which allows          deductions from a decedent's gross estate for certain claims, has          been carefully  crafted to promote  that policy.  In  a series of          revisions  to  the  statutory  language  early  in  the  century,          increasingly  formal requirements were imposed on claims based on          promises or agreements, see  Taft v. Commissioner, 304 U.S.  351,                                  ___  ____    ____________          355-56 (1938);5 Estate  of Pollard, 52 T.C. 741,  744 (1969), "to                          __________________                                        ____________________               5  The history  of  section  2053 was  detailed  in Taft  as                                                                   ____          follows:               The Revenue  Act of 1916 permitted the deduction of the               amount of  claims against  the estate  "allowed by  the               laws of the  jurisdiction . . . under  which the estate               is  being administered." . . .  The Act of 1924 altered               existing  law and  authorized the  deduction of  claims               against an  estate only  to the  extent that they  were               "incurred  or contracted  bona  fide  and  for  a  fair               consideration in money or money's worth."  Congress had               reason  to think that  the phrase  "fair consideration"               would be  held to comprehend  an instance of  a promise               which was  honest, reasonable, and  free from suspicion               whether or not  the consideration for it  was, strictly               speaking, adequate.    The  words  "adequate  and  full               consideration" were substituted  by   303(a)(1) of  the               Act of 1926.          304 U.S. at 356 (footnotes omitted).                                         -8-          prevent deductions,  under the guise  of claims, of what  were in          reality gifts or  testamentary dispositions," Carney v.  Benz, 90                                                        ______     ____          F.2d 747, 749 (1st Cir. 1937).               In other words, Congress wanted  to be sure that bequests to          family members and other natural objects of the decedent's bounty          were not transformed into deductible claims through collaboration          and creative contracting.  See Bank of New York v. United States,                                     ___ ________________    _____________          526  F.2d 1012, 1016-17  (3d Cir. 1975); Carney,  90 F.2d at 749;                                                   ______          Estate  of Satz  v.  Commissioner,  78  T.C. 1172,  1178  (1982);          _______________      ____________          Pollard, 52  T.C. at 744.  Thus, a  "claim against the estate" is          _______          deductible only  if the  agreement giving rise  to the  claim was          "contracted bona fide  and for an adequate and full consideration          in money or money's worth," 26 U.S.C.   2053(c)(1)(A).               Thus  far,  this  case  has  focused  primarily  on  whether          Elizabeth  Huntington received  sufficient consideration,  within          the meaning of  section 2053, for her promise  to include Charles          and  Myles  in her  will.    The  Tax Court  concluded  that  the          Huntingtons'  reciprocal  will agreement  was  supported  only by          donative  intent, and  that this  was not  enough to  establish a          deductible claim.   In its notice of appeal and in its brief, the          estate  specifically challenges the Tax Court's failure to credit          as   consideration  Elizabeth's   enhanced  inheritance   --  the          immediate $75,000 representing the bequests previously  earmarked          for Charles, Myles and Nancy, plus absolute rights in the balance          of   Dana's  estate  (in  contrast  to  simply  a  life  estate).          Alternatively, it offers as "adequate and full" consideration the                                         -9-          financial benefit conferred  on Elizabeth when Charles  and Myles          dropped the constructive trust lawsuit in exchange for her second          promise to include them in her will.               Our view of the caselaw,  reflected against the backdrop  of          section  2053(c)(1)(A)'s limiting purpose,  persuades us that the          real issue here  is not  whether Elizabeth  received a  financial          benefit from the reciprocal will agreement -- clearly, she did --          but  whether  the mutual  promises  made  by Dana  and  Elizabeth          created the sort of "bona fide" contractual obligation for  which          section 2053  allows a deduction.   We have little  difficulty in          concluding that they did not.               Two  threshold  propositions  inform  our  inquiry.   First,          transactions  among  family  members  are  subject  to particular          scrutiny, even  when they  apparently are  supported by  monetary          consideration, because that is the context in which a testator is          most likely to  be making a bequest  rather than repaying a  real          contractual obligation.  See Bank of New York, 526 F.2d at  1016;                                   ___ ________________          Estate of Morse  v. Commissioner, 69 T.C. 408,  418 (1977), aff'd          _______________     ____________                            _____          per  curiam, 625 F.2d  133 (1980); Estate of  Woody, 36 T.C. 900,          ___________                        ________________          903 (1961).6  Second, we need not be concerned with whether a tax          avoidance  motive was present here,  "because it is the substance          of the arrangement as a potential device for defeating the estate          tax that is of  controlling significance," Estate of Pollard,  52                                                     _________________                                        ____________________               6 We  note,  however, that  a  close relationship  does  not          necessarily  preclude a deduction under  section 2053.  See infra                                                                  ___ _____          at 13-14.  It simply requires  close judicial review.  Estate  of                                                                 __________          Morse, 69 T.C. at 418.          _____                                         -10-          T.C. at 745.   See also Young v. United States, 559 F.2d 695, 703                         ___ ____ _____    _____________          (D.C. Cir. 1977).               Thus, while  the record  in this  case provides no  evidence          that the Huntingtons sought to defeat estate  taxes through their          reciprocal will agreement, this fact does not assist the estate's          effort  to  overturn  the deficiency  judgment.    The record  is          equally  barren of  evidence indicating  that  the agreement  was          other than a collaborative effort to pass on the family's assets.          From  all that appears in  the record, it  is most plausible that          Dana  and  Elizabeth  discussed   their  respective  desires  for          disposing  of their property, and concluded that everyone's needs          would be  met by the simple  will ultimately executed  by Dana on          May  8, 1979,  and the  will Elizabeth  was expected  to complete          shortly  thereafter.    Such  a  purely  voluntary,  testamentary          arrangement  is not  the product  of  a bona  fide contract,  and          consequently does  not  provide a  basis  for a  deduction  under          section 2053.               The   estate  suggests  that,   because  Dana  had   a  firm          commitment,  evidenced  by  his  prior  wills,7  to  make  direct          bequests to his  sons, the change in his last will must have been          the product of bona fide  bargaining between the couple.  Neither          the fact that Elizabeth received an immediate advantage, relative          to the earlier wills,  nor Dana's longstanding intention to  make                                        ____________________               7 The will in effect before 1978, which had been executed in          1971, provided  for a bequest  of one-half of his  adjusted gross          estate  to Elizabeth,  and for  the  rest to  pass  to Myles  and          Charles.                                           -11-          his  sons beneficiaries  of  his estate  is  enough, however,  to          transform  an apparently cooperative  agreement into a  bona fide          contract.  See Estate of Morse, 69 T.C. at 418.                     ___ _______________               Dana simply may  have changed his mind about the best way to          provide for  his family, either  before or after  discussion with          Elizabeth.  By passing on his entire  estate to his wife, who was          substantially  younger than  himself, he  could  ensure that  she          would be fully provided for  as long as she  lived.  He may  have          felt that  Charles and  Myles, both well  into adulthood,  had no          immediate need for  the money.  By securing  his wife's agreement          that  the balance  of  both  of their  estates  would be  divided          equally among the couple's three children, he still could fulfill          his moral obligation to Charles and Myles.               There  is  no  evidence  that  Dana  and  Elizabeth  reached          agreement on the asserted reciprocal wills only after a period of          give-and-take bargaining.   Indeed, Dana's sister  testified that          her brother's  lawyer suggested that  "he not discuss  every last          detail of  his estate  plan [with  Elizabeth] because  . . .  she          would  probably want  to argue  over every  point."   Elizabeth's          wishes may have  played a substantial role in  Dana's decision to          change his will -- she was, after all, his wife -- but the record          is silent as to any form of negotiations.8                                        ____________________               8 In its brief, the estate points to comments allegedly made          by Elizabeth and by Dana's sister, Marjorie, suggesting that Dana          became increasingly vulnerable to Elizabeth's "verbal onslaughts"          during his  illness and  that Elizabeth was  aggressive on  money          issues  after Dana's  death.   This evidence  does  not, however,          reveal  why  and  how  Dana  and  Elizabeth  decided  to  execute          reciprocal wills.                                         -12-               This  is not  to say  that "hard  bargaining as  would occur          between  hostile parties  is  [] an  absolute  prerequisite to  a          deduction under section 2053," Estate of Morse, 69 T.C. at  419.                                          _______________          But when family  members adopt a course of action whose object is          to pass  on their collective  wealth, a deduction for  the amount          ultimately transferred is not permitted under section 2053 unless          there is  some showing  of a bargained-for  exchange.   Any other          conclusion would  seriously undermine  the policy  of taxing  the          transfer of  wealth  at  death.   Where,  as here,  there  is  no          evidence of any type of  negotiations, the claim to deductibility          unquestionably fails for lack of proof.               The  language of  the Third Circuit  in Bank of  New York v.                                                       _________________          United States, 526 F.2d at 1017, is equally applicable here:          _____________                    When the  interests  of  family  members  are  not               divergent  but coincide  so  that  the  elements  of  a               transaction advance the separate  concerns of each,  we               are unable to find the arm's length bargain mandated by               the  Code.  This  Court has adhered  to the distinction               between  family  arrangements  bargained  for at  arm's               length and family arrangements that reflect a community               of interests.  Tax advantages are not permitted when an               agreement between members of a family could be regarded               as  a   cooperative  attempt  to  make  a  testamentary               disposition rather than as an arm's length bargain.               Indeed,  on the issue  of arm's-length bargaining,  the case          before us is indistinguishable from Bank  of New York, in which a                                              _________________          husband  and wife executed reciprocal wills leaving their estates          first to each other  and then to specifically identified  friends          and relatives.  The wife later  made several changes in her will,          eliminating  one  of  the  husband's   chosen  beneficiaries  and          limiting the bequest to the  other.  The wife's estate eventually                                         -13-          settled with the two disadvantaged beneficiaries, and then sought          to deduct the settlement payment for estate tax purposes.               The Third Circuit upheld the Commissioner's rejection of the          deduction, concluding that "the value of the claim settled by the          estate may not  be deducted if the  agreement on which the  claim          was based was not bargained at arm's  length."  526 F.2d at 1016.          The court found that no  such bargaining took place there because          the  parties were  "of one  mind" when  they executed  the mutual          wills for the purpose of fixing the ultimate disposition of their          property.  Id.  at 1017.  "There  is nothing in the  record," the                     ___          court observed, "to support a  finding that the mutual wills here          were  executed as  the result of  an arm's length  bargain of any          sort."  Id.                  ___               The court  in Bank of  New York carefully  and appropriately                             _________________          distinguished  cases  involving  family   arrangements  in  which          deductions  were upheld, noting  that they involved  "the sort of          agreements  that arise  between  parties  separated by  divergent          interests," id. at 1016-17.  The clearest cases are those arising                      ___          in the  divorce setting,  where it is  likely that  the estranged          spouses obtain advantages only by trading them for concessions on          other issues.  See, e.g., Leopold v. United States, 510 F.2d 617,                         ___  ____  _______    _____________          624 (9th  Cir. 1975); Estate  of Scholl v. Commissioner,  88 T.C.                                _________________    ____________          1265, 1276 (1987).9                                        ____________________               9 Even  in the  divorce context, however,  a claim  will not          always be fully deductible.  See In re Estate of  Hartshorne, 402                                       ___ ___________________________          F.2d 592,  596 (2d  Cir. 1968)  (deduction allowed for  ex-wife's          life interest  in property  but denied  for children's  remainder          interest).                                           -14-               In other instances,  courts have upheld deductions  when the          underlying  transactions demonstrated that the claim at issue was          based on a  "purely commercial undertaking,"  Carney, 90 F.2d  at                                                        ______          749,  or  was  "[i]n  no sense  .  .  .  a  device for  making  a          testamentary gift," Estate of Woody, 36 T.C. at 904.  In Woody, a                              _______________                      _____          deduction  was  allowed for  a  father's $14,000  bequest  to his          daughter  that was intended  as reimbursement for  the daughter's          earlier release of her brother -- at her father's request -- from          an indebtedness  in that specific  amount.  In Carney,  the claim                                                         ______          against the  decedent's estate was  based on a guaranty  given by          the decedent  on behalf of  his wife  and daughter  in a  regular          business context.                Some  courts have  suggested that  a  bona fide,  deductible          claim  can be  differentiated from  one  that fails  to meet  the          requirements  for deductibility by examining whether the claim is          against  the estate or  to a portion  of the estate.   See, e.g.,          _______                 __                             ___  ____          Latty v. Commissioner,  62 F.2d 952, 953 (6th  Cir. 1933); Estate          _____    ____________                                      ______          of Lazar  v. Commissioner,  58 T.C.  543, 552  (1972).  In  other          ________     ____________          words, if  the  debt underlying  the claim  has its  origin in  a          discretionary desire to pass on wealth to specific individuals --          giving those individuals a claim "to"  a portion of the estate --          it  is  unlikely  to  be  the sort  of  bona  fide,  arm's-length          obligation  that is  deductible under  the  statute.   Deductible          claims will have arisen from transactions that created true debts          "against" the estate.                                         -15-               The estate,  of course, insists  that there was a  debt here                                                           ___          once Elizabeth made her promise and received a financial benefit,          but  then reneged on the deal.  It  may be that, under state law,          the reciprocal will  agreement was an enforceable  contract that,          when  violated, created  a debt  in  favor of  Charles and  Myles          against the estate.  A  valid contract is not necessarily enough,          however,  to establish a deductible claim for purposes of section          2053.  Bank of New  York, 526 F.2d at  1015; see also Stapf,  375                 _________________                     ___ ____ _____          U.S. at 131; Luce  v. United States, 444 F. Supp.  347, 350 (W.D.                       ____     _____________          Mo., S.D. 1977); Carli v.  Commissioner, 84 T.C. 649, 658 (1985);                           _____     ____________          Pollard,  52  T.C. at  744  ("To  be  sure, the  mutual  promises          _______          undoubtedly constitute consideration under the law  of contracts.          But the  statute requires more.").   A claim derived  solely from          Dana Huntington's desire to share some portion of his estate with          his sons,  carried out  through cooperative  estate planning,  is          precisely the sort  of "debt" section 2053(c)(1)(A)  was designed          to exclude.  See Bank of New York,  526 F.2d at 1018 ("The policy                       ___ ________________          of  section 2053  is to  deny  a deduction  where the  underlying          transaction was `essentially donative in character.'") (citing H.          Rep.  No. 2333,  77th Cong.,  2d Sess.  169 (1942)  (reprinted in          1942-2 Cum.  Bull. 372, 493);  S. Rep.  No. 1631, 77th  Cong., 2d          Sess. 238 (1942) (reprinted in 1942-2 Cum. Bull. 504, 679)).                 Nor  does the  subsequent  court-approved settlement  with          Elizabeth's  estate  transform  the claim  into  an  arm's-length          transaction within the meaning of section 2053.  The Bank  of New                                                               ____________          York case again is directly on point:          ____                                         -16-                    To  effectuate the  policy underlying  the federal               estate  tax  requires  that  courts  look  beneath  the               surface  of  transactions  to  discover  the  essential               character  of each  transfer.   Even  where a  claim is               ultimately  satisfied  by  the operation  of  law,  the               courts  will  determine  the nature  of  the  claim for               federal tax purposes by examining the particular status               of the claimant that enabled him to impose his claim on               the estate.          526 F.2d  at 1017.   See  also Luce,  444  F. Supp.  at 354;  cf.                               ___  ____ ____                           ___          Phillips  v.  Gnichtel,  27  F.2d  662,  663-64  (3d  Cir.  1928)          ________      ________          (involving  transfers made "in contemplation of death," which are          included in gross estate except in case  of "a bona fide sale for          a fair  consideration in  money or  money's worth")  ("[W]e [are]          inclined to go  to the heart of  the transaction and find,  if we          can, just  what the parties intended, just what they did and what          was the precise result.").               Our  examination  of the  issue  of arm's-length  bargaining          helps bring into  focus the parties' dispute  over consideration.          If  the reciprocal  will  agreement  did represent  collaborative          estate  planning  by  the Huntingtons,  the  fact  that Elizabeth          received  a larger  direct bequest than  she would  have received          under  Dana's  prior  will  is   of  no  consequence.    In  such          circumstances, the  increase  would  reflect  changed  priorities          rather  than a  bargained- for  "consideration."   Cf.  Estate of                                                             ___  _________          Morse, 69 T.C. at 418 ("[A] consideration hypothetically full and          _____          adequate  within the  statutory meaning  has no relevance  if the          asserted consideration was  not part of  the bargain between  the          parties."); Estate  of Morse, 625  F.2d at 135 ("[T]he  Tax Court                      ________________          was correct  in ruling  that it was  necessary to show  that such                                         -17-          consideration was  so bargained  for .  . . .").10   The  problem          with  the Huntington sons'  claim therefore may  be characterized          alternatively  as  a failure  of  proof  of  "full  and  adequate          consideration."               We need not  decide today whether there may  be some factual          circumstances  in  which  a  claim  that   began  with  a  wholly          discretionary   desire  to  make   a  bequest  can   fulfill  the          requirements of section 2053 for a "bona fide" contract supported          by  "an adequate  and  full  consideration  in money  or  money's          worth."   It suffices to  say that,  in this case,  the requisite          attributes of a deductible claim were not shown.               The decision of the Tax Court is affirmed.               _________________________________________                                        ____________________               10 In  Estate of Morse,  decedent and his wife  negotiated a                      _______________          detailed  antenuptial agreement to take care of various financial          concerns,  including  the   wife's  loss  of  income,   upon  her          remarriage,  from  a  trust established  by  her  former husband.          Decedent agreed  that, after  his death,  his wife would  receive          $12,000 per year during her life from his estate (the same amount          as provided by the forfeited trust).               The Tax  Court held  that the commuted  value of  the wife's          right to  receive the $12,000  was not deductible for  estate tax          purposes as  a claim against  her husband's estate  under section          2053.    The court  rejected the  contention that  the decedent's          right to live in his  wife's house rent-free during his life,  if          he had  survived  her, was  consideration  for his  agreement  to          provide her  with the  $12,000 income.    69 T.C.  at 418  ("[A]n          examination of the  facts and circumstances of  this case reveals          an absence of bargaining . . . .").                                         -18-