Voorhees v. Kelly

• Decision Date: 19 April 1943
• Docket Number: No. 228.,228.
• Citation: 130 N.J.L. 61,31 A.2d 404
• Parties: VOORHEES et al. v. KELLY, State Tax Commissioner.
• Court: New Jersey Supreme Court

130 N.J.L. 61

31 A.2d 404

VOORHEES et al.

v.KELLY, State Tax Commissioner.

No. 228.

Supreme Court of New Jersey.

April 19, 1943.

Certiorari to Prerogative Court.

Proceeding in the matter of the estate of Stephen H. Voorhees, deceased, by Edward L. Voorhees and Helen G. Voorhees, executors of the last will and testament of Stephen H. Voorhees, and others against William D. Kelly, State Tax Commissioner, involving the assessment of a tax on a transfer of property in trust allegedly made by deceased in contemplation of death. To review a decree of the prerogative court, 132 N.J.Eq. 230, 28 A.2d 61, subjecting the transfer to the tax and fixing the amount thereof, the executors and others bring certiorari.

Affirmed.

January term, 1943, before CASE, DONGES, and COLIE, JJ.

Walter E. Cooper, of Jersey City, for appellants.

David T. Wilentz, Atty. Gen., and William A. Moore, of Trenton, for respondent.

CASE, Justice.

The writ brings up for review a decree of the Prerogative Court determining that a transfer of securities by deed of trust made by Stephen H. Voorhees in his lifetime was made in contemplation of death (R.S. 54:34-1, subd. c, N.J.S.A. 54:34-1, subd. c) and determining, further, that the fair market value of the property as of the time of death should be included within the taxable estate of Mr. Voorhees for inheritance tax purposes.

Decedent died February 11, 1940, at the age of seventy-five years and six months leaving a net estate to pass by his last will and testament of $231,942.52. At about the age of sixty he went through a prostatectomy operation and thereafter, in 1926, voluntarily retired on pension under the permissible rules of the banking institution by which he had been employed.

On March 28, 1930, at the age of sixty-five, decedent executed an agreement by which he transferred certain securities of the then value of $460,000 and insurance policies on his life of the face value of $40,000 in trust during the lives of six named persons, of whom two were the donor's daughters and one was a grandson nine years of age, the income to be paid to the donor's wife during her life or until her remarriage and upon her death or remarriage the said income to be paid $600 and $1,500, respectively, per annum, for life, to two relatives by marriage who were of the above mentioned six persons, $600 per annum, for life, to another of the six, who was a friend, and the balance in equal shares to the two daughters or their lineal descendants and upon their deaths to their descendants, and upon the death of the survivor of the six named persons the principal of the trust to be divided among the donor's grandchildren or their lineal descendants per stirpes; ‘or in case there should be no grandchild of the settlor nor any lineal descendant of a deceased grandchild of his then surviving, to the brother of the settlor, Dr. Irving Wilson Voorhees, and the sister of the settlor, Eleanor S. Voorhees, in equal shares, or if either of them be not then living, to convey, transfer and pay over the whole thereof to the survivor, or in case neither of them be then living to the National City Bank Club.’

The decedent's last will was made January 5, 1932. It left the testator's residence, his household furniture and personal effects and $20,000 in cash to his wife, $2,000 in trust for a church and the net balance, beyond cemetery charges, in trust to be held during four lives-those of his wife, his two daughters and the grandson named above, the income to be paid to the testator's wife during her life or until her remarriage and then in...