Court Opinion

ID: 4619589
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:40:56.178478+00
Date Added: 2024-06-11T07:55:40.432270
License: Public Domain

Estate of Abraham Koshland, Deceased, Jesse Koshland, Executor, Petitioner, v. Commissioner of Internal Revenue, RespondentKoshland v. CommissionerDocket No. 13780United States Tax Court11 T.C. 904; 1948 U.S. Tax Ct. LEXIS 22; November 30, 1948, Promulgated *22 Decision will be entered under Rule 50.  Decedent in 1922 created a trust which he later amended in 1923.  The unrestricted power was retained in the decedent, as settlor, in conjunction with his wife, the life beneficiary, to alter and amend the trust.  Held:(1) The value of the remainder interests transferred is includible in decedent's gross estate under section 811 (d) (2) of the code, decedent's wife having no substantial adverse interest in remainders.(2) The application of section 811 (d) (2) in the present proceeding does not violate the due process clause of the Fifth Amendment of the Constitution.(3) In computation of the value of the includible remainder interests, (a) petitioner has not shown error in respondent's use of the Actuaries or Combined Experience Table included in his Regulations, and (b) no error has been shown in respondent's use of the factor set forth in the regulations applicable to quarterly payments. Samuel Taylor, Esq., Edgar Sinton, Esq., and Bernard Shapiro, Esq., for the petitioner.A. J. Hurley, Esq., for the respondent.  Kern, Judge.  KERN *904  Respondent determined a deficiency in the estate tax of petitioner in the sum of $ 49,062.25.  Practically all of this deficiency results from the inclusion by respondent in the decedent's gross estate of the value, as determined by him, of the remainder in a trust created by decedent in 1922.  The reasons given by respondent for such inclusion are that the decedent reserved the power to alter, amend, or revoke as to the remainder interests in the trust, and that the transfer to the trust*24  was intended to take effect at or after decedent's death.  Petitioner alleges that respondent erred in including such interests in decedent's gross estate, and, in the alternative, that the respondent's valuation of such interests was too high.  Petitioner also alleges that respondent erred in not allowing full credit for state inheritance taxes paid or payable, and in not allowing petitioner a deduction for legal fees as a result of this proceeding.  As to the last two issues, *905  the first is covered by the stipulation of the parties hereinafter referred to, and the second was not made the subject of any testimony.At the hearing herein a stipulation of facts was filed by the parties.  In addition oral and documentary evidence was introduced.FINDINGS OF FACT.We find the facts to be as stipulated by the parties, and set out herein a resume of those facts stipulated, together with our findings based upon the evidence adduced at the hearing.The decedent died on April 15, 1944, and his estate is in the process of administration in California.  The estate tax return of the petitioner estate was filed with the collector of internal revenue for the first district of California. *25  At the time of his death decedent was 75 years old, and his wife, Estelle W. Koshland, who was still living at the time this case was tried, was 66 years old.  She had been his wife for many years prior to 1922.  They had two sons, both of whom are living.  One, Stephen A. Koshland, was born in 1902, and the other, William A. Koshland, was born in 1906.  The older son married in 1938.  He and his wife have two children, one born in 1940 and the other in 1943.Decedent also had a brother, Jesse Koshland, with whom he had very close personal and business contacts until decedent's death.On December 26, 1922, the decedent created a trust by transferring certain securities, which had a cost to him of $ 290,596, to Jesse Koshland and Stanley H. Sinton (a nephew), who declared themselves trustees of this property in a declaration of trust, the pertinent provisions of which read as follows:Second: For and during the lifetime of Estelle W. Koshland of said Boston the income of this trust less proper charges and deductions including the payment of such taxes, municipal, state or Federal as may be levied thereon, shall be paid over unto her semi-annually, quarterly or oftener for and during*26  her lifetime and upon her death then said income shall be paid over unto Abraham Koshland of said Boston, semi-annually, quarterly or oftener for and during his lifetime, and upon the death of the survivor of the said Estelle W. Koshland, and the said Abraham Koshland, said fund shall be divided into two equal parts, and one of said parts shall be held for the use and benefit of each of Stephen A. Koshland and William A. Koshland, sons of the said Estelle W. Koshland and the said Abraham Koshland, upon the following terms and conditions, to wit: the income to be paid to the guardian of a son during his minority and upon such son attaining the age of twenty-one (21) to pay the said income to him for and during his lifetime. At any time after a son shall have attained the age of twenty-one (21) to pay over to such son from time to time such proportion of the principal of such trust fund as the Trustees may deem best, but not more than one-third (1/3) of such principal shall be advanced to him before he reaches the age of thirty (30) years, the balance of the principal may be paid over to him after he attains the age of thirty (30).*906  Upon the death of a son, to pay over the*27  principal of his share of this fund to the lawful issue of such son in such proportion and such manner and upon such terms as he may by any last will or testamentary instrument direct, and in default of such direction, then to and amongst his issue, or if he leave no issue, then to and amongst such other persons as he shall by any last will or other testamentary instrument direct, and in default of such direction, then to and amongst his heirs-at-law.Third: Neither said Stephen A. Koshland nor said William A. Koshland shall have any right to anticipate payments of income, nor shall the said Stephen A. Koshland or the said William A. Koshland have any right to assign or transfer any part of the fund or income therefrom to which he may be entitled hereunder, and if any such assignment shall be made, whether voluntary or involuntary, then in the discretion of the Trustees all right of such assignor may be determined and the share of such beneficiary disposed of in the same manner as if the beneficiary had died at the date of such assignment.The Trustees shall exercise uncontrolled discretion if in their judgment at any time it is deemed undesirable to pay over the income to any one*28  of the sons of said Estelle W. Koshland and Abraham Koshland to withhold the same and in that event they are authorized under the terms herein to expend the same or any part thereof for the benefit of the sons so entitled to such income, or they may allow such income or any unexpended part thereof to accumulate and add the same to the principal of said fund held for the benefit of such son.Fourth: At any time or during any period when no income is received, or where the income received is less than Fifteen Thousand (15,000) Dollars in any year, the Trustees may, upon the application of any beneficiary, apply and expend such part of the principal of the fund as may be necessary:(a) To provide either the said Estelle W. Koshland or the said Abraham Koshland with an income of Fifteen Thousand (15,000) Dollars for such year;(b) To provide any one of the children of said Estelle W. Koshland and Abraham Koshland with an income of Five Thousand (5,000) Dollars for such year.Fifth: Upon the death or resignation or inability of the said Jesse Koshland and the said Stanley H. Sinton to act as Trustees for a period of six (6) months, certified to by the beneficiaries, a new Trustee may be*29  appointed upon the nomination of the said Abraham Koshland for and during his lifetime, and after his death then by the nomination of the said Estelle W. Koshland for and during her lifetime and after the death of the said Estelle W. Koshland and the said Abraham Koshland, then upon the nomination of the two beneficiaries. A written nomination or appointment of such new trustee shall be filed with this Agreement and Declaration of Trust and the new appointee shall in writing accept and upon such written acceptance of his appointment, and the filing thereof with the nomination, shall thereupon, without any further act or conveyance, be vested with all the rights and powers of a Trustee, and subject to all the obligations and duties herein imposed.Sixth: The Trustees shall keep proper books of account, showing their receipts and disbursements which shall at all reasonable times be open to the inspection of the beneficiaries.Seventh: Power is hereby reserved during the lifetime of the said Abraham Koshland and given to the said Abraham Koshland, with the approval of the Trustees hereof, at any time in his uncontrolled discretion to amend this Declaration of Trust in any manner whatever, *30  and expressly including the right to limit or change the beneficiaries herein or the share or proportion of any beneficiary.*907  Eighth: Power is hereby reserved, during the lifetime of said Abraham Koshland, and given to the said Abraham Koshland at any time in his uncontrolled discretion to terminate this trust and upon such termination, the principal and undistributed income then in the hands of the Trustees shall be distributed to and amongst such person or persons as he shall direct by a written instrument addressed to the Trustees and authority is expressly reserved to the said Abraham Koshland to direct and designate himself as the person entitled to such distribution either in part or in whole of said fund.Ninth: Each and every one of the powers, purposes and provisions hereof, except as otherwise provided, shall be regarded as separate and distinct from every other power, purpose and provision so that no one shall be limited by reference to or inference from any other, and the enumeration of specific purposes and powers shall not be construed to limit or restrain in any manner the meaning of general terms.  If a court of last resort shall decree that any of the powers, *31  purposes, or provisions hereof are invalid, this shall not in any wise limit any other power, purpose or provision hereinbefore granted, but only such power, purpose or provision so decreed to be invalid shall be limited, and all other powers, purposes and provisions herein granted, shall be unmodified thereby.On December 26, 1923, decedent, for the first and only time, amended this trust.  The amendment canceled articles 7 and 8 of the original declaration of trust and substituted therefor the following:7. Power is hereby reserved during the lifetime of the said Abraham Koshland and given to the said Abraham Koshland and Estelle W. Koshland with the approval of the Trustees hereof at any time in the uncontrolled discretion of the said Abraham Koshland and Estelle W. Koshland to amend this declaration of Trust, and if during the lifetime of the said Abraham Koshland the said Estelle W. Koshland shall not be living, then any one of the sons of the said Abraham Koshland and the said Estelle W. Koshland, who is a beneficiary under the said Declaration of Trust, may exercise in conjunction with the said Abraham Koshland the power of amendment in place of, and in substitution for, said*32  Estelle W. Koshland, with the same force and effect as if the son so joining in such amendment had been originally and specifically named in the place and stead of said Estelle W. Koshland.8. This trust shall be irrevocable.Since the creation of the trust, two individuals closely related to decedent have served as trustees.  Since September 28, 1945, the two trustees have been decedent's sons.All of the income of this trust has been paid year by year to Estelle W. Koshland.  Prior to 1931 this income was in excess of $ 15,000 annually.  Since then, it has fluctuated between $ 10,000 and $ 14,000.  Although she has not made any application to the trustees for the payment from trust principal of any amount necessary to bring her income to the sum of $ 15,000, it was the intent of the decedent and the understanding of the trustees that she have this right; and it is conceded by respondent on brief that she is and was entitled to an annual income from the trust in the amount of $ 15,000.At the time of decedent's death, as well as at the time of the hearing in this proceeding (March 23, 1948) decedent's wife was in good *908  health, and her personal physician expected her to live*33  out her normal life expectancy.Decedent's power of amendment of the trust was unrestricted and was exercisable by him with a person not having a substantial adverse interest in the remainder.The fair market value of the trust estate, as of the date of decedent's death, was $ 231,524.64.In determining the value of the remainder interest, which respondent contends is includible in decedent's gross estate, he substracted from the value of the trust estate the value of decedent's wife's life estate, calculating this value in conformity with Table A appearing in Regulations 105, section 81.10 (i).  This table is based upon The Actuaries' or Combined Experience Table of Mortality.This table is the result of experience of seventeen British life insurance companies covering a period from 1762 until 1837; it makes no distinction between the length of male lives and the length of female lives.Many other tables of mortality have been in widespread use.  The Actuaries' or Combined Experience Table of Mortality is not now used by insurance companies in computing annuities. Insurance companies do not use annuity mortality tables in determining life insurance premiums or in calculating life*34  insurance reserves.  Annuity mortality tables reflect only the experience of insurance companies with annuitants as a class.  They do not purport to reflect the general mortality experience.  Annuitants, as a rule, are a self-selected group and tend to outlive the average.  For the purpose of computing life insurance premiums, insurance companies use their own mortality tables based upon their individual experience.Modern experience has demonstrated that females live longer than males, and some annuity tables now take this factor into account.The 1937 Standard Annuity Table has been used by insurance companies and by actuaries as a basis for determining annuities and life estates since 1937.  The table is used for both male and female lives, except that the age of the female is taken at an age five years younger than the male life.  It is one of the most current tables in use for the evaluation of annuities.The table currently used by insurance companies for purposes of reserves and the like and considered as reflecting general mortality experience is the Insurance Commissioners' 1941 Standard Ordinary Table of Mortality. This table is based upon experience in the years 1934 to*35  1936, with adjustment for possible epidemics and other catastrophes.Decedent's wife's expectation of life under various mortality tables is as follows: *909 Mortality TableAge 66Combined Experience or Actuaries' Table10.46American Experience10.54Insurance Commissioners' 1941 Table11.01American Annuitants'11.95Combined Annuity:Male12.17Female14.521937 Standard Annuity:Male13.81Female16.90The proper factor for quarterly payments is 1.01488, to be multiplied by the annuity value of the annual payments to the estate of Koshland under the trust.The value of the trust remainder, includible in decedent's gross estate, is $ 116,973.71.OPINION.The principal issue in this proceeding is whether the value of the remainder interest in the trust created and amended prior to 1924 is includible in decedent's gross estate. One of the grounds urged by respondent for inclusion is that the transfer was one in which the decedent reserved the power to alter and amend the trust within the meaning of section 811 (d) of the Internal Revenue Code1*37  and the applicable regulations. 2 Petitioner seeks to meet this argument by a three-fold*36  attack.  First, it is urged that after the 1923 amendments to the trust the right to amend further encompassed *910  only slight and trivial matters; second, that the right to amend was in conjunction with decedent's wife, who had a substantial adverse interest in the remainder of the trust; and, third, that the law and regulations may not be constitutionally applied to pre-1924 transfers.Petitioner's first point is without merit.  The trust instrument, as amended, contains a broad sweep of power.  It was provided: *38  7. Power is hereby reserved during the lifetime of the said Abraham Koshland and given to the said Abraham Koshland and Estelle W. Koshland with the approval of the Trustees hereof at any time in the uncontrolled discretion of the said Abraham Koshland and Estelle W. Koshland to amend this declaration of Trust.  * * *Petitioner would have us construe this language narrowly, since certain provisos appearing in the paragraph prior to amendment were deleted.  Rather than an aid to petitioner's view, these omissions can be interpreted as clothing decedent with as broad a power as it was possible to accord him.  In any event, the mere fact that no limitations appear can not be said to diminish the general power granted.None of the cases cited to us by petitioner, of which Theopold v. United States (CCA-1), 164 Fed. (2d) 404, is an example, are in point, as none contained as general a power of amendment as retained by this decedent. In the Theopold case, the power was limited to amend the trust instrument only "so that it will more clearly express my actual intentions * * *." The Circuit Court recognized that the trust instrument was inexpertly *39  drawn and the trustor wished to retain the power to settle meaning.  It further observed:* * * Certainly if he had wished to retain broad powers of amendment as to substance he could have said so very simply by merely reserving a general power to alter, amend or revoke.  * * *Such a general power as referred to by the court was here retained.Petitioner next contends that, irrespective of the scope of the power of amendment, it could not be exercised except in conjunction with a person having a substantial adverse interest. This raises the question of whether the life tenant, decedent's wife, can be said to have a substantial adverse interest in the remainder. 3 We believe that she did not.*40 *911 Petitioner's argument, with which we can not agree, is that decedent's wife had a substantial adverse interest in the remainder, since she possessed the right during her lifetime to have corpus invaded if it became necessary to assure her the receipt of $ 15,000 annually, and it was to her benefit to retain her sons as remaindermen.  This approach loses sight of the meaning and significance of the "substantial adverse interest" concept.  See Flood v. United States (CCA-1), 133 Fed. (2d) 173; Union Trust Co. of Pittsburgh v. Driscoll (CCA-3), 138 Fed. (2d) 152; certiorari denied, 321 U.S. 764">321 U.S. 764.Petitioner relies principally upon Commissioner v. Kaplan (CCA-1), 102 Fed. (2d) 329, and seeks to distinguish David J. Lit et al., Executors, 28 B. T. A. 853; affd., 72 Fed. (2d) 551, and Estate of Charles M. Thorp, 7 T.C. 921">7 T. C. 921; affd., 164 Fed. (2d) 966; certiorari denied, 333 U.S. 843">333 U.S. 843. In the Kaplan*41  case, decedent created a trust in 1923, of which he was trustee and his wife life beneficiary, with remainders over after his and his wife's deaths to their children.  The trust could be amended and revoked "by the Trustees," assented to by the life beneficiary. Under these facts, it was held that decedent's wife had a substantial adverse interest in the remainder, and hence it was not includible in decedent's gross estate. Among the reasons assigned to support this conclusion was the following:In this connection it is to be noted that Mr. Kaplan [decedent] as an individual reserved no right of revocation but rather granted these rights to the trustee then in office.  This fact, if not controlling, supports the conclusion that the trust was, when made, a fully completed transfer of all interests in the trust estate. * * *The Circuit Court distinguished the Lit case:Lit et al. v. Commissioner of Internal Revenue, 3 Cir., 72 F. 2d 551, relied upon by the petitioner, was a case where the remainder interest was held properly included, the trust instrument reserving in the settlor the right of revocation with the assent of the*42  life beneficiary. Apart from the distinguishing fact that the donor expressly reserved the right of revocation, it appears, also, that the trust was created in 1927 and the Revenue Act of 1926, sec. 302 (d), 44 Stat. 71, was applied.  * * *In the Lit case, the decedent in 1927 created a trust the income of which was to be paid to his wife for life, and after the death of both remainders were given to others.  The power of amendment and revocation was retained by decedent in his individual capacity, in which his wife was required to join.  It was there held that the value of the life estate vested in the wife should not be included as part of decedent's gross estate, but the remainder interest was includible; the wife was said to have a nonadverse interest in the remainder, and trust was deemed revocable within the meaning of section 302 (d) of the Revenue Act of 1926.  It was there said by us:* * * All that the settlor had to do in order to exercise this reserved power of revocation as to David Jack Lit was to do it in conjunction with Rosa L. Lit *912  [his wife], who was in no sense an adverse interest as to the remainder interest of the trust estate. * * *While it *43  is true that in the Porter case the settlor of the trust was left free to exercise the limited power which he reserved, alone and without having to secure the consent of any one, whereas in the instant case the settlor must secure the written consent of his wife, Rosa L. Lit, still, as we have already stated, Rosa L. Lit had no interest in the remainder interest and as to that she was not an adverse interest and we think these facts bring the situation as to the remainder interest within the purview of the language of section 302 (d).  * * *The Lit case was cited approvingly by us in the Thorp case, and by the Circuit Court in its affirmance.  There, decedent created a trust in 1918, reserving the power in himself to terminate the trust, cutting off the remainder interest, upon the request of the life beneficiaries. We held that the value of the transferred remainder interest was includible in decedent's gross estate under section 811 (d) (2) of the Internal Revenue Code.  The Circuit Court, in its affirmance, stated:* * * On the question whether the interests of the five children were "substantially adverse," the Tax Court said, "Here the persons in whom the right to*44  terminate was reserved were obviously not adversely interested in the exercise of that right as to the remainder -- which is the only matter basing the present controversy." Bearing in mind that by exercising their power of termination the children would have received "absolute property" in the corpus, rather than merely the income therefrom, and also the fact that there was a close family relationship, we are not prepared to say that the Tax Court erred in choosing from conflicting inferences the conclusion that their interests were not "substantially adverse." * * *Taxpayer's further contention that a beneficiary of a trust is "adverse to the grantor * * * regardless of whether a change would benefit or injure him" not only rejects the ordinary meaning of the word "adverse," but also meets such insurmountable obstacles as Helvering v. City Bank Co., supra at page 90, and the express language of the Tax Court in Lit v. Commissioner, 28 B. T. A. 853, 860-861 (1933), affirmed by this court in 72 F. 2d 551 [14 AFTR 481] (1934).  * * *Such cases as Estate of Frederick S. Fish, 45 B. T. A. 120,*45  where the life tenant had also a power of appointment over the remainder interest, and Mackay v. Commissioner (CCA-2), 94 Fed. (2d) 558, reversing 33 B. T. A. 765, holding that a remainderman has an adverse interest in the life estates, cited to us by petitioner, are clearly distinguishable and are not in point.Since we hold that decedent reserved to himself the power of amendment with a person whose interest was nonadverse as to that portion of the trust property sought to be included in decedent's gross estate, petitioner's constitutional argument, based upon the application of the law and regulations to pre-1924 transfers, disappears.  Estate of Charles M. Thorp, supra. Cf.  Commissioner v. Kaplan, supra;Union Trust Co. of Pittsburgh v. Driscoll, supra.In view of our decision that the remainder interest is includible in decedent's gross estate, under section 811 (d), it becomes unnecessary *913  to decide whether it is also includible under 811 (c) of the code.  There does remain, however, one further question, i. e., *46  the value of the interest to be included.The parties have stipulated the fair market value of the trust estate as of the date of death.  The area of disagreement is as to the value of the life interest which is to be subtracted.  Petitioner contends that it is unsound to determine such value in conformity with respondent's regulations, 4 as they are based upon an obsolete mortality table, and, further, that an improper factor for quarterly payments is therein employed.  The burden of proving these contentions is upon petitioner.  Estate of Charles H. Hart, 1 T. C. 989; Estate of Koert Bartman, 10 T.C. 1073">10 T. C. 1073.The questions petitioner raises are not new.  Estelle May Affelder, 7 T. C. 1190; Henry F. du Pont, 2 T. C. 246. We have carefully considered all of the evidence introduced by petitioner.  It is of the same purport as that presented by taxpayers in some*47  of the earlier cases, and we must conclude that petitioner has not borne the burden of proof on either point.An actuarial expert called by petitioner testified as to the history of various mortality tables, and then expressed the opinion that if he had his choice of the table to be used to value the life estate he would select the 1937 Standard Annuity Table.  This table shows a life expectancy for decedent's wife of over six years more than the table embodied in respondent's regulations, and about five years more than the table approved in Anna L. Raymond, 40 B. T. A. 244; affd., 114 Fed. (2d) 140; certiorari denied, 311 U.S. 710">311 U.S. 710, a case upon which petitioner chiefly relies.  It should be observed that the latest mortality table presented indicates a life expectancy of 11.01 years for decedent's wife as compared to 10.46 years in the table incorporated in respondent's regulations.The table petitioner urges might be worthy of further consideration if our question were the cost of an annuity from a commercial insurance company.  This was the underlying problem posed in the Raymond case, and it*48  was there considered proper to utilize a table that such companies were using in their annuity business.  We observed in the Bartman case, supra, "that insurance companies take into consideration the element of self-selection in writing annuities; and that they use whatever tables are best suited for their particular needs." There is no showing here that the mortality of inheritors or donees closely resembles that of purchasers of annuity policies.  In fact, contrary evidence appears in the record.Whatever may be the shortcomings of the table used by respondent, cf. concurring opinion of Mellott, J., in Henry F. du Pont, supra, *914  petitioner has not convinced us that the 1937 table or any other table, not embodied in respondent's regulations, must be applied in this proceeding, or that respondent's use of the Combined Experience Table in this proceeding is erroneous.  Estelle May Affelder and Estate of Koert Bartman, both supra.Even greater weakness pervades petitioner's argument as to the proper factor for quarterly payments. The actuarial expert testified that the factor respondent used was proper if only an annuity*49  for a term certain were involved, but was not correct if the annuity were for life.  He testified further that the value of a life annuity, payable quarterly, is less than the value of an annuity certain, payable quarterly, for a term equal to the annuitant's life expectancy. Yet the factor petitioner urges and the method of its application lead to a higher value for a life annuity. This discrepancy could not be adequately explained by petitioner, nor was there any significant evidence as to the derivation of the factor it sought to have us apply.  Petitioner's view can not be sustained.  Estelle May Affelder, supra.Decision will be entered under Rule 50.  Footnotes1. SEC. 811. GROSS ESTATE.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, except real property situated outside of the United States --* * * *(d) Revocable Transfers.  -- * * ** * * *(2) Transfers on or prior to June 22, 1936.  -- To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power, either by the decedent alone or in conjunction with any person, to alter, amend, or revoke, or where the decedent relinquished any such power in contemplation of his death, except in case of a bona fide sale for an adequate and full consideration in money or money's worth * * *.↩2. Sec. 81.20 [Regulations 105].  Transfers with power to change the enjoyment.* * * *(b) Taxability.  -- The property or any interest therein transferred as described in subsection (a) shall be included in the gross estate if it comes within any one of the following paragraphs:(1) If the transfer was made prior to the enactment of the Revenue Act of 1924 (4:01 p. m., eastern standard time, June 2, 1924), and the power was reserved at the time of the transfer and was exercisable by the decedent alone or in conjunction with a person or persons having no substantial adverse interest or interests in the transferred property, or if exercisable in conjunction with a person having a substantial adverse interest or with several persons some or all of whom held such an adverse interest, then to the extent of any interest or interests held by a person or persons not required to join in the exercise of the power and to the extent of any adverse interest which was not substantial.↩3. The question of whether the decedent's wife had a substantial adverse interest in this pre-1924 inter vivos transfer becomes important under the established doctrine of Reinecke v. Northern Trust Co., 278 U.S. 339">278 U.S. 339. It was there recognized that a transfer in trust, where the settlor reserved to himself alone or to himself with a person having a nonadverse interest, was not a completed transfer because the property did not pass completely out of his control until his death, and as such was includible in the decedent's gross estate even prior to the enactment of the Revenue Act of 1924.  The taxing statute is not unconstitutional as to trusts created prior to its enactment if the transfers thereunder are incomplete. Chase National Bank v. United States, 278 U.S. 327">278 U.S. 327. Section 302 (d) of the Revenue Act of 1924 first introduced the provision that if the settlor in conjunction with any person reserved the right to revoke or otherwise materially change the transferred interests, the conveyance was taxable.  As to transfers after that date, the "substantial adverse interest" requirement is immaterial.  Helvering v. City Bank Farmers Trust Co., 296 U.S. 85">296 U.S. 85↩.4. Regulations 105, sec. 81.10 (i).↩