Fabian v. Walsh. In Re Gallaudet's Estate.

• Decision Date: 10 March 1948
• Citation: 134 Conn. 456,58 A.2d 384
• Court: Connecticut Supreme Court
• Parties: FABIAN v. WALSH. In re GALLAUDET'S ESTATE.

134 Conn. 456

58 A.2d 384

FABIAN

v. WALSH.In re GALLAUDET'S ESTATE.

Supreme Court of Errors of Connecticut.

March 10, 1948.

Appeal from Superior Court, New Haven County; Murphy, Judge.

Proceeding by Ellen G. Fabian, administratrix of the estate of Elizabeth Y. Gallaudet, against Walter W. Walsh, Tax Commissioner. From a decree of the Probate Court for the District of Branford finding that a transfer in trust made by deceased was subject to succession tax, the plaintiff appealed to the Superior Court in New Haven County, where trial was had to the court, Murphy, J. From a judgment of the Superior Court for the defendant and dismissing the appeal, the plaintiff appeals.

No error.

Curtiss K. Thompson, of New Haven, and Milton Goss, of Pine Orchard, for appellant.

Louis Weinstein, Inheritance Tax Atty., of New Haven (William L. Hadden, Atty. Gen., and Frederic W. Dauch, Asst. Tax Commissioner, of Waterbury, on the brief), for appellee.

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS and DICKENSON, JJ.

JENNINGS, Judge.

The issue involved in this appeal is whether the transfer, on the death of the settlor, of property constituting the corpus of a trust is subject to the Connecticut succession tax as a transfer intended to take effect in possession or enjoyment at or after the death of the transferor.

The facts necessary to a decision of this case are substantially undisputed. Plaintiff's decedent, Elizabeth Y. Gallaudet, was the wife of Herbert D. Gallaudet and they had one child, Ellen, who, on August 25, 1934, married Richard Fabian. On December 27, 1935, when she was fifty-four years of age and in excellent health, the decedent set up the trust in question. It provided that the income should be distributed to or for the benefit of herself, her husband or their daughter, but the trustees were empowered to turn over any or all of the corpus of the fund from time to time to either Mr. Gallaudet or Mrs. Fabian, ‘provided that Trustees so acting shall have first determined, as to each such case, that the transaction in question is reasonably necessary for the comfort, support, maintenance, setting up in business, profession or occupation, or otherwise comes within the general purposes of this Trust as interpreted by the Trustees.’

The principal provision regarding the termination of the trust is as follows: ‘13. This Trust shall terminate, save as hereinafter provided, upon the decease of the longest liver of the said Herbert D. Gallaudet and Elizabeth Y. Gallaudet and any remaining Trust property shall be fully and finally distributed as hereinafter provided.’

Various changes occurred in the personnel of the trustees, and the decedent was one of them at the time she died. Herbert died on June 24, 1944, and Elizabeth on January 1, 1945. On March 12, 1942, Elizabeth had irrevocably renounced any rights she might have to any income of the trust fund or to participation in its assets, and thereafter no income was paid to her nor was a distribution of any character made to her from the trust fund.

The parties are agreed that the controlling statute is General Statutes, Cum.Sup.1935, § 486c. This provides that transfers made by a decedent are taxable if made ‘(d) by gift or grant intended to take effect in possession or enjoyment at or after the death of the transferor.’ The transfers in this case did in fact take effect at the death of the transferor. Section 14 of the trust agreement provides that on the death of the survivor of Herbert and Elizabeth all of the trust property shall be turned over absolutely to Ellen. The intention expressed by the settlor is plain. It was that if Elizabeth survived Herbert her death would be the occurrence which would determine the ultimate succession. Elizabeth did survive Herbert. We are not concerned with the situation which would have resulted had Herbert survived Elizabeth. ‘* * * that situation did not happen and, as stated by Judge Cardozo in Matter of Schmidlapp's Estate 236 N.Y. 278, 286, 140 N.E. 697, 699, ‘we are to view the sequence of events in the order of the actual rather than the possible.’' Bryant v. Hackett, 118 Conn. 233, 247, 171 A. 664, 669. Since, as stated above, Elizabeth, the transferor, did survive Herbert, her death was the necessary factor to effectuate the transfer to Ellen of any property remaining. Under these circumstances, the Connecticut cases uniformly hold the transfers taxable whether the income is reserved to the transferor for life; Blodgett v. Guaranty Trust Co., 114 Conn. 207, 213, 158 A. 245; or whether the income is reserved to another; Hackett v. Bankers Trust Co., 122 Conn. 107, 116, 187 A. 653; provided the...