Court Opinion

ID: 4475703
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:39.386099+00
Date Added: 2024-06-11T14:53:53.730578
License: Public Domain

Raum, /., dissenting: In Helvering v. Mercantile-Commerce Bank & Trust Co., 111 F. 2d 224, the Court of Appeals for the Eighth Circuit reversed the decision of this Court in Estate of Paul F. Donnelly, 38 B. T. A. 1234. I think that the decision of the Court of Appeals is correct, and that it cannot fairly be distinguished from the present case, at least to the extent that the income from the trusts herein was dedicated to the support and maintenance of the decedent’s wife. It is said that the trust provisions in the Mercantile-Commeree Bank case gave the settlor an “enforceable right” to have the income applied for the support and maintenance of his wife, whereas no such right existed here. But the trust instruments herein definitely called for the payment of income to the wife for her maintenance and support, and it is not accurate to suggest that these provisions were merely hortatory. Surely, if she squandered that income and then sued the grantor for maintenance and support, the existence of these trusts would be a good defense. By establishing the trusts, the decedent effectively discharged his obligation to maintain and support his wife, to the full extent that income therefrom was paid over to her. Thus, by providing for the application of income to the discharge of that legal obligation, he to that extent in fact retained, within the meaning of section 811 (c), “the possession or enjoyment of, or the right to the income from” the property which he transferred in trust. TURNER, HaRron, and Offer, JJ., agree with this dissent.