Court Opinion

ID: 4483835
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:19.78714+00
Date Added: 2024-06-11T14:53:44.805395
License: Public Domain

Goffe, J., concurring: I concur with the majority in all respects but, nevertheless, feel that additional explanation is needed as to the lack of existence of a prearranged plan. The trial judge, in his dissenting opinion, concludes that it is clear from the record that there was a prearranged plan to give the decedent the opportunity to direct disposition of the insurance proceeds. The record supports a contrary conclusion. The application for insurance contains the signature of the decedent as insured and Mrs. Margrave as applicant but the record is silent as to when the document was executed by each. The only direct evidence concerning the existence of a prearranged plan is the uncontradicted testimony of Solomon Schwartz, the insurance agent who sold the policy to Mrs. Margrave.. He testified that Mrs. Margrave completed the questions on the application and signed it and that decedent signed the application as the insured. On cross examination of Mr. Schwartz by counsel for respondent, the following dialogue is reported: Mr. Henry: Was it ever expressed to you that also one of the reasons for the trust — naming the trust as beneficiary was a desire on the part of the decedent to control the proceeds? A. No, not at all. Mrs. Margrave was going to be able to control her own proceeds and it’s just simply that the trust coincided with her wishes. That had been set up by Robert Margrave for his own estate and rather than go through the expense of setting up another one that would be identical in wording, she used that one since he would — he would have already been gone if it was going to be exercised. Q. And can life insurance be taken out without the insured approval or consent? A. No, the insured must — the insured must be a party to it unless they’re below the age of fourteen and a half, a child. Then a parent can do it for the child. But above fourteen and a half, the insured has to be a party to the contract. Q. The only question I have still on my mind is the decedent — from the other answer you gave me — the decedent didn’t express any concern of having control over the proceeds at all? A. None whatsoever. Q. He didn’t care if — no matter who was paid the proceeds, he never expressed any concern over that? A. No, on his own policies he cared, but as-far as the policy that was owned by his wife, she could have named the children individually if she wanted to. And he would not have cared. Q. Or some distant relative, he never expressed any concern? A. None whatsoever. And he would have no control of it. It wasn’t his policy. Q. He was willing to let the insurance be taken out on his life and paid to whoever without any concern of who it was being paid to? A. Quite frankly, I wouldn’t be concerned if my wife did it. If there’s a deep love, you do what your spouse would want to do. You don’t look for any motives. Mr. Henry: Thank you. The Witness : And there was a deep love here. Mr. Henry: Thank you. I don’t have any further questions. [Tr. p. 22, line 8 — p. 23, line 25.] In view of Mr. Schwartz’ testimony, it is not difficult to understand why respondent never requested a finding of fact in his brief that decedent and Mrs. Margrave had a prearranged plan for disposition of the insurance proceeds. To conclude, as the trial judge does in his dissenting opinion, that there was a prearranged plan, he must disregard the testimony of Mr. Schwartz. Where evidence which is competent, relevant, and credible is uncontradicted, the Tax Court may not arbitrarily discredit or disregard it. Banks v. Commissioner, 322 F.2d 530, 537 (8th Cir. 1963). In my view, the testimony of Mr. Schwartz was not improbable, unreasonable, or questionable. We are, therefore, bound to accept his testimony as true. Banks v. Commissioner, supra; Gilman v. Commissioner, 65 T.C. 296 (1975), affd. per curiam 547 F.2d 32 (2d Cir. 1976). It follows that the record as a whole does not support a finding of fact that a prearranged plan existed. Sterrett, J., agrees with this concurring opinion.