Williams v. U.S., 78-3797
| Decision Date | 22 January 1981 |
| Docket Number | No. 78-3797,78-3797 |
| Citation | 634 F.2d 894 |
| Parties | 81-1 USTC P 13,388 Mrs. Claude M. WILLIAMS, Individually, etc., et al., Plaintiffs-Appellees, Cross-Appellants, v. UNITED STATES of America, Defendant-Appellant, Cross-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
M. Carr Ferguson, Gilbert S. Rothenberg, Asst. Attys. Gen., Gilbert E. Andrews, Chief, App. Sec., James A. Riedy, Richard Farber, Tax Div., Dept. of Justice, Washington, D. C., for defendant-appellant, cross-appellee.
Robert Lee Bobbitt, Jr., San Antonio, Tex., Douglass D. Hearne, Austin, Tex., for plaintiffs-appellees, cross-appellants.
Appeals from the United States District Court for the Western District of Texas.
Before WISDOM, RONEY and HATCHETT, Circuit Judges.
The controlling issue in this federal estate tax refund case is whether the pre-death incompetence of a decedent holding a general power of appointment permits exclusion from her estate of the property subject to that power. This Court has just decided that such property is includable in the decedent's estate under section 2041 of the Internal Revenue Code, 26 U.S.C.A. § 2041. Estate of Gilchrist v. Commissioner, 630 F.2d 340 (5th Cir. 1980). We therefore reverse the district court's decision for the taxpayer on the Government's appeal. That decision also resolves against the taxpayer a cross-appeal seeking to exclude from the estate the settlement paid to a stepson for his claim against the estate.
The decedent was left a life interest coupled with an inter vivos general power of appointment in all of her husband's property in 1957. In 1971 she was adjudicated incompetent by a Texas County court and remained so until her death in 1972. She never exercised her general power of appointment over the life estate.
In calculating estate taxes, the executrix excluded from the estate the property in the life estate. After a deficiency assessment by the Internal Revenue Commissioner, the tax was paid and this refund suit instituted. The district court, on cross motions for summary judgment, ruled for the taxpayer.
The case of Estate of Gilchrist v. Commissioner, 630 F.2d 340 (5th Cir. 1980), decided subsequent to the district court's decision in this case, and submitted to another panel of this Court prior to this submission, requires reversal. Section 2041 provides that a decedent's gross estate includes the value of all property over which the decedent has a general power of appointment at the time of...
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