Court Opinion

ID: 4477909
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:47.324201+00
Date Added: 2024-06-11T15:03:30.518236
License: Public Domain

Turner, /., dissenting: I am in complete accord with the holding that the gift of the right to income was the gift of a present interest and the gift of the right to corpus the gift of a future interest, under the Disston and Fondren cases. I do not agree, however, that because the trustee, in his discretion, could distribute the trust corpus at any time, the size or value of the present interest was, or could be, any less than it' would have been if the grant to trust had placed no such discretionary power in the trustee. Or, stated differently, I am unable to see how the size and amount of a gift of a right to receive currently the income from certain property for a stated period is in any way lessened or made indeterminable merely because, at the discretion of the trustee, the recipient of the gift of the right to income could at any time become the possessor and title owner of the income-producing property itself. The valuation of a right to income of certain property for a period of years or for the life of an individual has not heretofore presented unsurpassable difficulties, and I do not believe it does so here. William Harry Kniep, 9 T. C. 943, was a different case. In that case there was only one trust, with six beneficiaries, and under the trust the trustee might invade corpus for the benefit of one or more of the beneficiaries at the expense of the others. Such authorized disproportionate distributions of corpus among the beneficiaries could result in variations in the size and values of the income interests of the beneficiaries, which could not be foreseen or determined as of the date of the gifts of the rights to income. In the instant case, each trust had a single beneficiary and no part of either the present interest in the trust income or the future interest in the trust corpus could be shifted to anyone else. The only result which could flow from the exercise by the trustee of his discretion to distribute the trust corpus prior to the time specified in the trust instrument would be that the beneficiary would, in addition to the income from the property which he was to receive currently, receive possession and title to the property itself in advance of the time provided therefor in the trust instrument. I agree that the views which I have expresed above are contrary to the pronouncements of the court in Herrmann’s Estate v. Commissioner, 235 F. 2d 440, affirming T. C. Memo. 1955-212. And while I am in complete accord with what we said in Arthur L. Lawrence, 21 T. C. 713, I do not feel that we thereby committed ourselves to the persistent following of a previously decided case, if we should become convinced that the decision therein was wrong, and it being my opinion that Herrmann’s Estate v. Commissioner was incorrectly decided, I am of the view that it should not be followed. FoeeesteR, J., agrees with this dissent.