Court Opinion

ID: 6447606
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:25:14.49255+00
Date Added: 2024-06-11T15:51:36.910401
License: Public Domain

Cutter, J.
(concurring) I agree that no excise can be imposed under 0. L. c. 65 with respect to the succession by any trust beneficiary to any part of the trust principal. I agree, upon limited grounds, that an excise under c. 65 may be imposed with respect to the succession by the trust bene-to their several interests in the aggregate trust income in excess of $20,000 annually,1 to be received between the settlor’s death in 1956 and the termination of the trust.
The opinion relies largely upon a portion of somewhat obscure language in State St. Trust Co. v. Treasurer & Recr. Gen. 209 Mass. 373, 378. The only basis upon which a succession tax may be imposed with respect to the beneficiaries’ interests in the additional income required to be paid to them after the settlor’s death is that any absolute right (as opposed to a possibility) of these beneficiaries to succeed to those additional income interests is expressly made by the trust instrument dependent upon the settlor’s death. In the State St. Trust Co. case, an excise was properly imposed because (p. 378) “the passing of the” bonds there involved (as distinguished from the income from them) was not “independently of the death of the transferror.” This basis of the decision was recognized in Dexter v. Treasurer & Beer. Gen. 243 Mass. 523, 526.2 In the present case the payment of the additional income in excess of $20,000 similarly was not “independently of the [settlor’s] death.”
The present excise, with respect to the succession of these trust beneficiaries to their additional income interests, is warranted by the fact that the settlor, in his 1928 trust instrument, expressly made succession to those interests as of right directly dependent upon his own death. In providing in his trust for augmented income interests at his *22death, the settlor sufficiently caused a succession to take place then, dependent upon his death, to bring that succession within the scope of the excise.
The trustees contend that no gift of an interest can be said to be intended to take effect in possession or enjoyment at a settlor’s death unless the beneficiaries can succeed to that interest only by reason of his death. They rely upon New England Trust Co. v. Abbott, 205 Mass. 279, 281-282; Pratt v. Dean, 246 Mass. 300, 307-308 (“All interests . . . could take effect in possession and enjoyment only after the [settlor’s] death”); Boston Safe Deposit & Trust Co. v. Commissioner of Corps. & Taxn. 267 Mass. 240, 245; and Worcester County Natl. Bank v. Commissioner of Corps. & Taxn. 275 Mass. 216, 220. See Coolidge v. Commissioner of Corps. & Taxn. 268 Mass. 443, 450 (reversed on grounds not here relevant, sub nom. Coolidge v. Long, 282 U. S. 582). These decisions imposed an excise with respect to an interest which could only accrue in possession and enjoyment by reason of the settlor’s death. They do not state, however, that no excise may be imposed where, under the express terms of the applicable instrument, a particular interest may be enjoyed as of right by reason of the settlor’s death, whereas prior thereto that interest, under the instrument, could be received only by the exercise of fiduciary powers involving some measure of discretion or by action the effect of which involved significant uncertainties.
The trustees also rely upon two cases discussing the Federal estate tax. See Commissioner of Int. Rev. v. Marshall’s Estate, 203 F. 2d 534, 537-539 (3d Cir.); Smith v. United States, 158 F. Supp. 344, 349-350 (D. Colo.). These were decided under statutory provisions and regulations differing from G. L. c. 65, § 1 (as amended through St. 1955, c. 596) in effect at the settlor’s death. Under an *23estate tax the imposition of an excise often depends upon whether the settlor has made a completed transmission of his property without reserving to himself any interest, whereas c. 65, § 1, imposes an excise upon the succession to property interests by reason of, and dependent upon, the death of the decedent or settlor.
The Chief Justice, Mr. Justice Spalding, and Mr. Justice Whittemore join in this opinion.

 The sum. of $20,000 annually was the maximum, amount required to be paid prior to the settlor’s death to the trust’s income beneficiaries.

 In the Dexter case, an excise was not imposed upon the trust property there transferred although a completed transfer was subject (pp. 525, 526-527) to an unused power in the settlor to revise the trust and to change the beneficiaries, which could not benefit the donor in any event (cf. Porter v. Commissioner of Int. Dev. 288 U. S. 436, 443), whereas in Gregg v. Commissioner of *22Corps. # Taxn. 315 Mass. 704, 706-707, a more general power of revocation was held to make taxable the receipt of the property in possession and enjoyment at the donor’s death. No power of revocation or revision of any type existed in the present case. Cf. Boston Safe Deposit Trust Co. v. Commissioner of Corps. Taxn. 294 Mass. 551, 556.