Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

FLORIDA NATL. BANK OF JACKSONVILLE v. UNITED STATE

October 2, 1963

The FLORIDA NATIONAL BANK OF JACKSONVILLE, FLORIDA, and Herbert T. Ballard, Jr., as Co-Executors of the Estate of Herbert T. Ballard, Deceased
v.
UNITED STATES of America



The opinion of the court was delivered by: WOOD

This is an action for the recovery of estate taxes paid by the plaintiffs, executors of the Estate of Herbert T. Ballard, hereinafter referred to as the decedent, who died December 15, 1956.

On February 20, 1929, decedent had created an inter vivos trust which contained, inter alia, the following language:

 'Ballard has irrevocably parted with the title to the securities and property constituting the subject matter of this trust estate, but reserves to himself the right at any time to make any change in the limitations herein contained with respect to the distribution of principal and income of this trust fund, provided that no such appointment shall be in favor of himself or of his estate. Ballard further reserves the right at any time, upon thirty days written notice to the Trustee, to cause the resignation of the Trustee, which shall then state a final account of its management of the trust estate and shall deliver all the assets composing the trust estate to such other Trustee as Ballard may designate, and shall thereupon be released and discharged from all liability as trustee hereunder. In all other respects this Deed of Trust is irrevocable.' (Emphasis supplied)

 It is stipulated and agreed that the Court has jurisdiction of the issue and that all necessary preliminary steps have been taken by the plaintiffs prior to the determination of the litigation by us.

 The Government included in the gross estate of the decedent the value of the trust under § 2038 of the Internal Revenue Code of 1954 on the theory that the decedent retained, by the above language of the trust, the power to alter, amend or revoke it. Section 2038 provides as follows:

 ' § 2038. Revocable transfers.

 '(a) In general. -- The value of the gross estate shall include the value of all property (except real property situated outside of the United States) --

 '(1) Transfers after June 22, 1936. --

 '(2) Transfers on or before June 22, 1936. -- To the extent of any interest therein of which the decedent has at any time made a transfer * * *, by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power, either by the decedent alone or in conjunction with any person, to alter, amend, or revoke, or where the decedent relinquished any such power in contemplation of his death. Except in the case of transfers made after June 22, 1936, no interest of the decedent of which he has made a transfer shall be included in the gross estate under paragraph (1) unless it is includible under this paragraph.

 '(b) Date of existence of power. -- For purposes of this section, the power to alter, amend, revoke, or terminate shall be considered to exist on the date of the decedent's death even though the exercise of the power is subject to a precedent giving of notice or even though the alteration, amendment, revocation, or termination takes effect only on the expiration of a stated period after the exercise of the power, whether or not on or before the date of the decedent's death notice has been given or the power has been exercised. In such cases proper adjustment shall be made representing the interest, which would have been excluded from the power if the decedent had lived, and for such purpose, if the notice has not been given or the power has not been exercised on or before the date of his death, such notice shall be considered to have been given, or the power exercised, on the date of his death.' (26 U.S.C.A. § 2038)

 Plaintiffs argue that the defendant Government erred in this respect since the transfer of title to the corpus of the trust brings it under the provisions of § 2036 of the Code, as enacted in 1954. Section 2036 reads as follows:

 '(a) General rule. -- The value of the gross estate shall include the value of all property (except real property situated outside of the United States) to the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money's worth), by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death --

 '(1) the possession or enjoyment of, or the right to the income from, the property, or

 '(2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.