Gardner v. United States
| Citation | 1 F. Supp. 483 |
| Parties | GARDNER v. UNITED STATES. |
| Decision Date | 20 June 1932 |
| Court | U.S. District Court — Southern District of Florida |
Douglas D. Felix, of Miami, Fla., for plaintiff.
W. P. Hughes, U. S. Atty., of Jacksonville, Fla., and Raymond F. Brown, Sp. Asst. to U. S. Atty., of Miami, Fla.
This action is brought by the plaintiff as administrator of the estate of Mary A. Gardner, deceased, for a refund of estate taxes and interest thereon paid to the United States by the estate of Mary A. Gardner. $118.90 of the amount claimed has been abandoned, by reason of its being barred by time.
The pleadings admit the payment of the tax and interest, and the dates of the same. It is also admitted that the net value of the property in question is $141,364.48. The plaintiff contends that the said property, of the said value, was held under a trust created by an agreement dated November 17, 1916, signed by the decedent and her husband, with William B. Moore, her son-in-law, and John A. Gardner, her son, whereby the property was transferred in trust to them, with a reservation of only one-third interest to the decedent, and that this estate tax paid on the two-thirds interest was illegal, and the recovery of the amount of which is sought.
The defendant asserts that the trust agreement was created by the decedent in contemplation of her death, and therefore the said agreement is void as far as the estate tax is concerned, under section 402 (c), Revenue Act of 1921 (42 Stat. 278).
The principle of the law under which we are to determine this matter is clearly set forth in United States v. Wells, 283 U. S. 102, 51 S. Ct. 446, 450, 75 L. Ed. 867. It is there stated that the rule set forth in many cases in the inferior federal courts, and adopted by the Court of Claims, viz. that the creating of a trust must be under condition of "a reasonable fear that death is near at hand," and that "such reasonable fear or apprehension" must be "the only cause of the transfer," is too narrow a construction of the Revenue Act, and establishes as the proper rule, "It is sufficient if contemplation of death be the inducing cause of the transfer whether or not death is believed to be near," and further says, "If it is the thought of death, as a controlling motive prompting the disposition of property, that affords the test, it follows that the statute does not embrace gifts inter vivos which spring from a different motive."
The evidence in this case is that the decedent was 65 years of age at the time of entering into the trust agreement whereby the property in question was transferred to her son-in-law and son; that she had been in poor health previous to that time, but had recovered her general health; that her husband was about 72 years of age; that the property in question was in need of refinancing to make it produce an income for them, but that they did not have the means to make improvements and to meet the monthly payments required under a mortgage of $37,500, then on the property; that Moore had...
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