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U.S. Supreme Court

Helvering v. St. Louis Union Trust Co., 296 U.S. 39 (1935)

Helvering v. St. Louis Union Trust Co.

No. 25

Argued October 24, 25, 1935

Decided November 11, 1935

296 U.S. 39


1. Some years before his death, decedent conveyed property in trust to pay the income to his daughter during her life, with remainder over to persons named. The indenture also provided (1) that, if the trustee should exercise a discretionary power given him to terminate the trust, or (2) the daughter should die before the grantor did, the property should be transferred, to the grantor, to be his absolutely. Neither of the contingencies had taken place when the grantor died. Held that the transfer was not "intended to take effect in possession or enjoyment at or after his death," within the meaning of § 302(c), Revenue Act of 1924. P. 296 U. S. 40.

2. That which gives rise to the estate tax laid by § 301(a) of the Revenue Act of 1924 is the death of the decedent, with the resulting transfer of his estate, either by will or the law relating to intestacy. When, therefore, § 302(c) includes within the purview of § 301(a) a transfer inter vivos "intended to take effect in possession or enjoyment at or after his death," it does so upon the theory that such a transfer in effect is testamentary -- that is to say, a substitute for either a disposition by will or a passing in virtue of intestacy. P. 296 U. S. 41.

3. In this case, the grantor had retained no right in the trust estate which was the subject of testamentary disposition, and his death

Page 296 U. S. 40

passed no interest to any of the beneficiaries of the trust; it did not enlarge the interests conveyed by the indenture, but simply extinguished a mere possibility of reverter. Klein v. United States, 283 U. S. 231, distinguished. P. 296 U. S. 43.

75 F.2d 416 affirmed.

Certiorari, 295 U.S. 727, to review a judgment of the Circuit Court of Appeals sustaining an order, 28 B.T.A. 107, disapproving a deficiency tax assessment.

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