Lober v. United States
| Decision Date | 09 November 1953 |
| Docket Number | No. 30,30 |
| Citation | 346 U.S. 335,74 S.Ct. 98,98 L.Ed. 15 |
| Parties | LOBER et al. v. UNITED STATES |
| Court | U.S. Supreme Court |
Mr. David Stock, New York City, for petitioners.
Mr. Charles K. Rice, New York City, for respondent.
This is an action for an estate tax refund brought by the executors of the estate of Morris Lober. In 1924 he signed an instrument conveying to himself as trustee money and stocks for the benefit of his young son. In 1929 he executed two other instruments, one for the benefit a daughter, the other for a second son. The terms of these three instruments were the same. Lober was to handle the funds, invest and reinvest them as he deemed proper. He could accumulate and reinvest the income with the same freedom until his children reached twenty-one years of age. When twenty-one they were to be paid the accumulated income. Lober could hold the principal of each trust until the beneficiary reached twenty-five. In case he died his wife was to be trustee with the same broad powers Lober had conveyed to himself. The trusts were declared to be irrevocable, and as the case reaches us we may assume that the trust instruments gave Lober's children a 'vested interest' under state law, so that if they had died after creation of the trusts their interests would have passed to their estates. A crucial term of the trust instruments was that Lober could at any time he saw fit turn all or any part of the principal of the trusts over to his children. Thus he could at will reduce the principal or pay it all to the beneficiaries, thereby terminating any trusteeship over it.
Lober died in 1942. By that time the trust property was valued at more than $125,000. The Internal Revenue Commissioner treated this as Lober's property and included it in his gross estate. That inclusion brought this lawsuit. The Commissioner relied on § 811(d)(2) of the Internal Revenue Code, 26 U.S.C. § 811 (1946 ed.), 26 U.S.C.A. § 811. That section, so far as material here, required inclusion in a decedent's gross estate of the value of all property that the decedent had previously transferred by trust 'where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power * * * to alter, amend, or revoke * * *.' In Commissioner of Internal Revenue v. Holmes' Estate, 326 U.S. 480, 66 S.Ct. 257, 261, 90 L.Ed. 228, we held that power to terminate was the equivalent of power to 'alter, amend, or revoke' it, and we approved taxation of the Holmes estate on that basis. Relying on the Holmes case, the Court of Claims upheld inclusion of these trust properties in Lober's estate. 108 F.Supp. 731, 124 Ct.Cl. 44. This was done despite the assumption that the trust conveyances gave the Lober children an indefeasible 'vested interest' in the properties conveyed. The Fifth Circuit Court of Appeals had reached a contrary result where the circumstances were substantially the same, in Hays' Estate v. Commissioner of Internal Revenue, 5 Cir., 181 F.2d 169, 172—174. Because of this conflict, we granted certiorari. 345 U.S. 969, 73 S.Ct. 1111.
Petitioners stress a factual difference between this and the Holmes case. The Holmes trust instrument provided that if a beneficiary died before...
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United States v. Byrum 8212 308
...Commissioner of Internal Revenue v. Estate of Holmes, 326 U.S. 480, 66 S.Ct. 257, 90 L.Ed. 228 (1946),7 and Lober v. United States, 346 U.S. 335, 74 S.Ct. 98, 98 L.Ed. 15 (1953). Now the majority would have us accept the incompatible position that a settlor seeking tax exemption may keep th......
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Craft v. Comm'r of Internal Revenue (In re Estate of Craft)
...to support his position that the amount involved is includable in decedent's estate under both of the above sections. Lober v. United States, 346 U.S. 335 (1953); Round v. Commissioner, 332 F.2d 590 (1st Cir. 1964); Guggenheim v. Helvering, 117 F.2d 469 (2d Cir. 1941). Petitioner does not d......
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Bischoff v. Comm'r of Internal Revenue (In re Estate of Bischoff)
...is sufficient to attract a tax under sections 2036(a)(2) and 2038(a)(1). United States v. O'Malley, 383 U.S. 627 (1966); Lober v. United States, 346 U.S. 335 (1953). We simply are not convinced that the Supreme Court intended to close a perceived loophole under section 2036(a)(1) and, at th......
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UNITED STATE V. BYRUM
...than general fiduciary requirements. See also Commissioner v. Estate of Holmes, 326 U. S. 480 (1946), [Footnote 2/7] and Lober v. United States, 346 U. S. 335 (1953). Now the majority would have us accept the incompatible position that a settlor seeking tax exemption may keep the power of i......