HELVERING V. HELMHOLZ, 296 U. S. 93 (1935)

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U.S. Supreme Court

Helvering v. Helmholz, 296 U.S. 93 (1935)

Helvering v. Helmholz

No. 14

Argued October 15, 16, 1935

Decided November 11, 1935

296 U.S. 93


1. Members of a family the two parents and their children- transferred the stock of the family corporation under a trust instrument, which provided for paying the net dividends to them and their issue during the existence of the trust, and for disposition of the shares upon its termination. The trust was to terminate (1) if the parents had died, upon the death of their last surviving grandchild; or (2) upon delivery to the trustee of a writing, signed by all of the then beneficiaries, declaring it at an end; or (3) upon unanimous vote of the directors of the corporation, so declaring; or (4) if the corporation were dissolved for any cause provided by law, and upon the happening of any of these events, the stock was to be distributed among the beneficiaries then entitled to receive the dividends. Upon the extinction of the issue of the parents, they being then also dead, the stock was to be turned over to a charitable trust. Held, that none of these provisions for termination of the trust was a power to "alter, amend or revoke" the transfer within the meaning of the Revenue Act of 1926, § 302(d). P. 296 U. S. 96.

2. A provision in a trust indenture that the trust shall terminate when all beneficiaries join in so declaring merely expresses a condition which the law itself imposes; this is not a power "to alter, amend or revoke," within the meaning of § 302(d), Revenue Act, 1926. P. 296 U. S. 97.

3. Section 302(d) of the Revenue Act of 1926 would violate the Fifth Amendment if applied to a transfer in trust, made before its enactment, which was complete when made, and which left no power in the grantor to revoke, alter or amend without the consent of other beneficiaries of the trust. P. 296 U. S. 98.

75 F.2d 245 affirmed.

Certiorari, 295 U.S. 724, to review the affirmance of a decision of the Board of Tax Appeals, 28 B.T.A. 165, disapproving an increase of estate tax assessment.

Page 296 U. S. 94

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