Land Title & Trust Co. v. McCaughn, 13020.
| Decision Date | 10 April 1934 |
| Docket Number | No. 13020.,13020. |
| Citation | 7 F. Supp. 742 |
| Parties | LAND TITLE & TRUST CO. v. McCAUGHN, Collector of Internal Revenue. |
| Court | U.S. District Court — Western District of Pennsylvania |
Benjamin O. Frick, of Philadelphia, Pa., for plaintiff.
P. E. Miller, of Washington, D. C., and Thomas J. Curtin, Asst. U. S. Atty., and Charles D. McAvoy, U. S. Atty., both of Philadelphia, Pa., for defendant.
This is a suit at law brought by the plaintiffs as executors of the estate of Dr. Malcolm MacFarlan to recover an inheritance tax in the amount of $29,937.07 with interest as claimed, paid by them, after audit and revision of their return by the Commissioner of Internal Revenue. The trial was to the court without a jury.
The controversy arises out of a transfer of property made by the decedent during his lifetime, creating an irrevocable trust for his children. The indenture of trust was executed one year and ten months before the decedent's death, was without consideration, and conveyed practically all his property.
The only question involved is whether or not the transfer was in contemplation of death. The opinion of the court in United States v. Wells, 283 U. S. 102, 51 S. Ct. 446, 451, 75 L. Ed. 867, is a complete and authoritative interpretation of the phrase "in contemplation of death." After pointing out that the expression means something more than the general expectation of death which all entertain, and something less than a present apprehension that death is near at hand,1 the court observed that the dominant purpose of the provision was to reach substitutes for testamentary dispositions, and, following that thought, announced the general rule that a transfer is in contemplation of death when the motive which induces it is of the sort which leads to testamentary disposition. The differentiating factor, between a transfer in contemplation of death and a valid gift inter vivos, must therefore be found in the transferor's motive.
If the transfer is of a material part of the decedent's property without consideration and made within two years prior to his death, the statute (Revenue Act 1926, § 302 (c), as amended, 26 USCA § 1094 (c), provides that it shall be deemed to have been made in contemplation of death, "unless shown to the contrary." The burden is then upon the taxpayer to show that the motive is not "of the sort which leads to testamentary disposition," and it has come to be pretty generally recognized by the courts that he can meet this burden only by showing affirmatively what the motive was. Further, it follows that the burden is not met if a motive is disclosed which is as consistent with a testamentary disposition of his property as with a gift inter vivos; or if two motives are disclosed, either of which might have accounted for the transfer, the one testamentary and the other not. Farmers' Loan & Trust Company v. Bowers (C. C. A.) 68 F.(2d) 916.
The age, physical condition, and state of mind of the transferor are always important, but never ultimate, considerations, being useful only to the extent that they throw light on the motive. Expectation of imminent death would be strong evidence that the motive was testamentary but not necessarily conclusive or irrefutable, while on the other hand "it cannot be said that the determinative motive is lacking merely because of the absence of a consciousness that death is imminent." United States v. Wells, supra.
With regard to the decedent's physical condition and state of health, the evidence in this case shows that at the time of the transfer he was seventy-eight years old, unusually vigorous and clear-minded, and, except for an enlargement of the prostate gland (a common enough condition in men of his age), in good health. The most that the plaintiffs can claim for this evidence is that it establishes that the transfer was not made under any consciousness or belief or apprehension that death was imminent. In order that the plaintiffs may have the full benefit of this testimony, I specifically find that such was the fact.
There was also some evidence as to the motivating cause of the transfer. I have no doubt that the decedent's desire to conserve his property for his children, that is, to...
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Bell v. United States
...motives are disclosed either of which might have accounted for the transfer, the one testamentary and the other not. Land Title & Trust Co. v. McCaughn, D. C., 7 F.Supp. 742; First Trust & Deposit Co. v. Shaughnessy, 2 Cir., 134 F.2d 940, certiorari denied 320 U.S. 744, 64 S.Ct. 46, 88 L.Ed......
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Mossberg v. McLaughlin
... ... ‘ as to the transfers in trust, it was decedent's ... intention that possession or ... 48, ... 51, 56 S.Ct. 78, 80 L.Ed 35; Land Title & Trust Co. v ... McCaughn, D.C., 7 F.Supp. 742, ... ...
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..."`The gratification of such desires may be a more compelling motive than any thought of death.'" Another case, Land Title & Trust Co. v. McCaughn, D.C., 7 F.Supp. 742, 744, was an executors' action to recover an inheritance tax. The indenture of trust in question was executed only a year an......
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Caughn v. Real Estate Land Title Trust Co
...upon them by the statute.' The court then found a general verdict in favor of the defendant and directed judgment accordingly. (D.C.) 7 F.Supp. 742, 744. The Circuit Court of Appeals reviewed the evidence, decided that the transfer was not made in contemplation of death, and reversed the ju......