Busch v. Walsh. In Re Busch's Estate.

• Decision Date: 11 March 1948
• Docket Number: No. 7798.,7798.
• Citation: 57 A.2d 528
• Parties: BUSCH et al. v. WALSH. In re BUSCH'S ESTATE.
• Court: New Jersey Prerogative Court

57 A.2d 528

BUSCH et al.

v. WALSH.In re BUSCH'S ESTATE.

No. 7798.

Prerogative Court of New Jersey.

March 11, 1948.

Proceeding in the matter of the appeal by George J. Busch, Jr. and others, executors of the will of George J. Busch, Sr., deceased, from the transfer inheritance tax assessment in the estate of George J. Busch, Sr., deceased, by Frank E. Walsh, Director of Division of Taxation, Department of Taxation and Finance.

Decree adviced affirming assessment.

Syllabus by the Court.

The object of the transfer inheritance tax statute is to tax not only testamentary and intestae transfers but also inter vivos transfers which as mere substitutes for testamentary dispositions are employed to effectuate a purpose normally accomplished by a will.

Bilder, Bilder & Kaufman, of Newark (Walter J. Bilder, of Newark, of counsel), for petitioners.

Walter D. Van Riper, Atty. Gen., and William A. Moore, special counsel, of Trenton, for respondent.

JAYNE, Vice-Chancellor.

One George J. Busch, Sr., a resident of Newark, Essex County, died testate on June 20, 1944, at the age of 82 years. Between the year 1937 at the age of 75 and the date of his death seven years later, he transferred directly and indirectly to the natural objects of his bounty by means of inter vivos assignments assets of the appraised value of $143,539. One might now infer that he initially underestimated his eventual life expectancy because he thereby so diminished and exhausted his financial resources that during the epilogue of his life he was obliged to borrow money for his support and maintenance, and he died leaving an insolvent estate.

Nevertheless, I am told in the prosecution of the present appeal that it was manifestly erroneous for the taxing authority to determine that such transfers were made by the decedent either in contemplation of death or were in the circumstances intended by him to be transfers designed to become potentially effective in the beneficial possession and enjoyment of the donees only at and after his death and consequently taxable. R.S. 54:34-1, subd. c, N.J.S.A.

One cannot, however, perspicaciously appraise the performance by merely witnessing the silhouette. I adhere to my conviction that: ‘It is also injudicious to assume initially that every relatively large gift made by a donor of advanced age is made in contemplation of death and then survey the evidence solely from that point of view.’ Squier v. Martin, 131 N.J.Eq. 263, 24 A.2d 865, 871.

Yet, it is irrefutable that the age and contemporary environment of the donor, the proportionate dislocation of his estate accomplished by his inter vivos transfers, and the deliberately selected destinations of his gifts are all relevant and significant factors which merit consideration in the effort to ascertain the intent and purpose of the donor.

It has been my practice and is my preference to compose, if possible, from the available evidence in these cases a biographic commentary upon the qualities of the transferor, his temperament, affections, proclivities, and propensities. A study of such qualities of the individual so often exposes the probable motives that impelled his acts. While I have nonetheless thoughtfully examined and analyzed the evidence in the present cause, the pressure of judicial work at this season obliges me in this instance to express my conclusions in a somewhat summary fashion.

This decedent displayed in the latter stages of his life the virtues of generosity, but it is noticeable that his benefactions were not exported beyond the family circle. Compare, Montclair Trust Co. v. Zink, N.J.Misc., 57 A.2d 372.

This decedent, having retired from active business, resolved at the age of 75 to organize a corporate receptacle for most of his personal resources. Why? Various reasons might be conjectured, but in this instance the actual and exclusive functions of the corporation under his personal control give utterance to the unmistakable answer.

The corporation was manifestly utilized as a conduit through which the decedent gradually drained off to his beneficiaries the accumulated assets of his own...