Court Opinion

ID: 4479701
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:48.970022+00
Date Added: 2024-06-11T15:03:32.935982
License: Public Domain

Black, J., concurring: I concur in the result reached by the majority opinion, though I doubt if it can be distinguished from our Court’s recent decision in Joel E. Hall, 4 T. C. 506, in which the opposite result was reached. I dissented in the Hall case and pointed out the reasons why I did not think the income of the irrevocable trust involved in that case should be taxed to the grantor. Another comparatively recent case by this Court which it might be thought is in conflict with the result reached in the instant case is Louis Stockstrom, 3 T. C. 255; now on review, C. C. A., 8th Cir. However, after carefully reading the facts in that case and comparing them with those present in the instant case, I do not believe the result reached in the instant case is in conflict with the Stockstrom case. In the Stochstrom case the three trusts which were made for the settlor’s three adult children contained powers which enabled the settlor-trustee to shift income beneficiaries somewhat similar to the powers reserved to the grantor in Commissioner v. Buck, 120 Fed. (2d) 775. There are no such powers granted to the settlor-trustees in the instant case. In the Stochstrom case the seven trusts which were set up for the benefit of Stockstrom’s seven grandchildren, while not granting to the settlor-trustee powers which were as extensive as those contained in the trusts for his three adult children, did grant to the settlor-trustee the discretion to either accumulate the income or distribute it to the beneficiary. These trusts were for the lifetime of the beneficiaries. We construed this power as being broad enough to enable the settlor-trustee to completely withhold the income of the trust from the grandchild beneficiary throughout his lifetime. To quote from the opinion itself in the Stockstrom case, the settlor-trustee “was not required to distribute any part of the income to any of the beneficiaries during his lifetime.” We held that this power over the income, when coupled with the broad administrative powers granted the settlor-trustee over the corpus in these several trusts, caused the income to be taxable to the settlor, Stockstrom. In the instant case the primary purpose of the trusts is to provide for the education of the settlors’ three minor children and any accumulated income and principal not used for that purpose is to be turned over to the beneficiary when he reaches 30 years of age. Thus each of the three trusts here involved is to completely terminate when the beneficiary reaches 30 years of age and all the corpus and accumulated income is to be turned over to the beneficiary. The trusts in that respect are not unlike those present in J. O. Whiteley, 3 T. C. 1265, where we held that Helvering v. Clifford was not applicable. The administrative powers granted to the trustees in the instant case are quite broad and are, I think, as broad as those present in the Stockstrom case, but I think the Supreme Court in Helvering v. Stuart, 317 U. S. 154, made clear that retention by the grantor of only broad administrative control over the corpus does not make the income of a long term family trust taxable to him. For these reasons above stated, I concur in the result reached in the majority opinion. Disney, J., agrees with the above.