Court Opinion

ID: 9625381
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:38:36.472635+00
Date Added: 2024-06-11T18:06:07.463519
License: Public Domain

JONES, Chief Judge (dissenting in part).
I would not decide this case on the basis stated in the majority opinion. I do not believe the settlor retained the substantial control contemplated by the statute.'
' If under the New York law, in the event of the death of a beneficiary, the property would revert to the settlor rather than be distributed to the heirs of the deceased beneficiary, the petition should be dismissed; otherwise plaintiff should be allowed to recover.
Findings of Fact
The court makes findings of fact based upon the facts as stipulated by the parties, the briefs and argument of counsel, as follows:
1. Morris Lober, the decedent, died a resident of the County of Westchester, State of New York, on the 13th day of December, 1942.
2. The will of the decedent, dated and executed November 24, 1936, a true copy of which is attached to the petition herein as Exhibit D thereto, was duly admitted to probate and letters testamentary thereunder were duly issued by the Surrogate’s Court of Westchester County, New York, on the 6th day of February, 1943, to Louis Lober, Charles Lober, Alma T. Lober and Max Lober.
3. Louis Lober, Charles Lober, Alma T. Lober and Max Lober acted as executors of the will of said decedent from the 6th day of February 1943 to the 7th day of October 1946. Max Lober died on the 7th day of October 1946. Since the death of said Max Lober the petitioners herein, namely, Louis Lober, Charles Lober and Alma T. Lober 'have continued to act and are now acting as surviving executors of said will.
4. Decedent on October 31, 1924, by instrument in writing, created a trust for the benefit of his son, Robert T. Lober, consisting of cash in the amount of $742.02 and 75 shares of stock of Importers and Exporters Insurance Company, a true copy of which instrument is annexed to the petition herein as Exhibit A thereto.
5. Decedent on March 15, 1929, by instrument in writing, created a separate trust for the benefit of his son, James Morris Lober, consisting of cash in the amount of $1,325.50 and 25 shares of stock of National Park Bank, a true copy of which instrument is annexed to the petition here in as Exhibit B thereto.
*7346. Decedent on March 18, 1929, by instrument in writing, created a separate trust for the benefit of his daughter, Maxine Lober, consisting of 50 shares of stock of Public National Bank transferred on or about March 18, 1929, and cash transferred on or about March 27, 1929, in the amount of $2,709.00, a true copy of which instrument is annexed to the petition herein as Exhibit C thereto.
7. On August 27, 1934, decedent executed three separate instruments in identical form separately confirming the fact that each of said trusts referred to in paragraphs 4, 5 and 6 hereof had been duly constituted and had been and was irrevocable, true copies of which three instruments are annexed to the petition herein immediately after Exhibits A, B and C thereto.
8. Robert T. Lober, at the time of the creation of the trust for his benefit was the only child of the decedent, Morris Lober. James Morris Lober and Maxine Lober and said Robert T. Lober constituted all the children of the decedent, Morris Lober, at the time of the creation of the trusts for the benefit of James Morris Lober and Maxine Lober. Said three persons at all times subsequent to the creation o'f said trusts were the only children of the decedent, Morris Lober and said three persons all survived decedent.
9. None of said trusts referred to in paragraphs 4, 5, and 6 hereof was created by the decedent in contemplation of death.
10. On March 14, 1944, Louis Lober, as executor of the Estate of Morris Lober, deceased, paid to the Collector of Internal Revenue at Albany, New York, the amount of $93,642.56 in payment of the estate tax liability on this estate as shown in the estate tax return.
11. By letter dated June 7, 1946, the Internal Revenue Agent in Charge of the Upper New York Division notified the executors of a proposed adjustment to the estate tax liability of this estate. One of such adjustments was the inclusion in the estate of the decedent of the assets of the three trusts created by the decedent, Morris Lober, for his children. The assets of the three trusts were valued by the Internal Revenue Agent as of December 13, 1942 at $128,139.67.
12. On January 17, 1947, plaintiff, Louis Lober as executor of the will of said decedent, signed a waiver of restrictions and consent to assessment and collection of estate tax on said estate in the sum of $109,-917.47 with interest (which resulted from the inclusion of said trust assets and also from other changes in the estate tax schedules as filed) but reserved the right to file a claim for refund on the issue of the propriety of including the assets of said three trusts.
13. On February 20, 1947, plaintiffs, as such executors, paid to the Collector of Internal Revenue at Albany, New York, the sum of $129,261.44, representing the deficiency of $109,917.47, with interest of $19,343.97. A' further deficiency was as-séssed in March 1947 in the amount of $12,166.62, representing the balance of the tentative credit for state estate taxes taken into consideration in arriving at the above-mentioned deficiency, together with interest of $2,183.16. No part of this additional deficiency has been paid by the plaintiffs to the United States or any officer or agency thereof.
14. On April 23, 1947, plaintiff, Louis Lober, as executor of the will of said decedent, duly filed a claim for refund on Form 843 requesting refund of estate tax in the amount of $39,012.19 assessed and collected as aforesaid and interest claimed and collected thereon up to February 19, 1947, in the amount of $6,865.62 or a total of $45,877.81. On or about and under date of September 2, 1947, the Commissioner of Internal Revenue rejected the claim for refund in its entirety.
15. No part of the payment of $129,261.-44 paid on February 20, 1947, as set forth in paragraph 13 hereof, has been refunded to the plaintiffs.
16. If the plaintiffs herein are held entitled to any refund of estate taxes, the parties have agreed that such amount shall be adjusted by credit for state estate and inheritance taxes if plaintiffs establish the payment for credit thereof in accordance *735with Section 813(h) of the Internal Revenue Code, 26 U.S.C.A. § 813(b).
Conclusion of Law
Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes that, ,as a matter of law, the plaintiffs are not entitled to recover, and the petition is therefore dismissed.
Judgment is rendered against plaintiffs for the cost of printing the record herein, the amount thereof to be entered by the clerk and collected by him according to law.