Waite v. Wis. Tax Comm'n (In re Waite's Will)

• Citation: 242 N.W. 173,208 Wis. 307
• Parties: IN RE WAITE'S WILL. WAITE ET AL. v. WISCONSIN TAX COMMISSION.
• Decision Date: 05 April 1932
• Court: United States State Supreme Court of Wisconsin

208 Wis. 307

242 N.W. 173

IN RE WAITE'S WILL.^a1

WAITE ET AL.

v.WISCONSIN TAX COMMISSION.

Supreme Court of Wisconsin.

April 5, 1932.

Appeals from portions of an order of the County Court of Winnebago County; D. E. McDonald, County Judge.

Proceeding between Wisconsin Tax Commission and Philip C. Waite and others, to determine inheritance tax upon the estate of Frederick E. Waite, deceased. From that part of the order fixing the tax which assessed a tax upon the value of property in a trust agreement made by decedent, Philip C. Waite, Stanley E. Waite, and Nancy Ruth Waite, sole living beneficiaries of the trust, appeal.--[[[By Editorial Staff.]

Affirmed.

The order is dated September 21, 1931, and orders the payment of an inheritance tax of $20,056.03. Of such inheritance tax the sum of $4,836.44 is ordered payable on the value of the property in a certain trust agreement, and represents the amount in dispute upon this appeal.

The decedent, Frederick E. Waite, died September 22, 1930. On August 19, 1919, he entered into an irrevocable trust agreement whereby he transferred to his trustee certain shares of the common and preferred stock of the Waite Grass Carpet Company, in trust, to pay to the trustor the net annual life income during his lifetime, and upon his death to distribute one-half of the corpus to grantor's son, and to administer the remaining one-half for the benefit of three grandchildren until they had attained respectively the age of twenty-five years, at which time they should receive their shares of the corpus. It was provided that in the event of the death of said son the entire corpus should be administered for the grandchildren. The son, O. T. Waite, predeceased the trustor, and the grandchildren, Philip C. Waite, Stanley E. Waite, and Nancy Ruth Waite, appellants herein, are the sole living beneficiaries of the trust. The court expressly found that this trust was not made in contemplation of death, but deemed the trust agreement to constitute a transfer intended to “take effect in possession or enjoyment at or after death” of the trustor, taxable under section 72.01, subd. (3), Stats., and assessed thereon a tax of $4,836.44 against the beneficiaries. From this order, the beneficiaries under the trust agreement appeal.Thompsons, Gruenewald & Frye, of Oshkosh, for appellants.

John W. Reynolds, Atty. Gen., F. C. Seibold, Asst. Atty. Gen., Neil Conway, Inheritance Counsel, of Madison, and S. J. Luchsinger, Public Adm'r of Oshkosh, for respondent.

WICKHEM, J.

The sole question involved here is whether the transfer was one intended to take effect in possession or enjoyment at or after the death of the donor, by reason of the fact that the donor reserved the income to himself during his lifetime. No constitutional question is raised, and the case involves solely a determination as to the proper construction of section 72.01, subd. (3), Wis. Stats., which, so far as it applies here, reads as follows:

“(3) Transfers in Contemplation of Death. When the transfer is of property, made by a resident or by a nonresident when such nonresident's property is within this state, or within its jurisdiction, by deed, grant, bargain, sale or gift, made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.”

The contention of the appellants is that the trust agreement vested title in the remainder at the time of its execution, and hence that the remainder did not pass from the possession, enjoyment, or control of the donor at his...