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MCDOWELL NATL. BANK OF SHARON v. UNITED STATES

September 9, 1976

McDOWELL NATIONAL BANK OF SHARON, PENNSYLVANIA, Trustee under Agreement of Louis J. Wiesen, Plaintiffs,
v.
UNITED STATES of America, Defendant



The opinion of the court was delivered by: MCCUNE

 Plaintiff filed this action pursuant to § 1346(a)(1) of The Judicial Code, Act of June 25, 1948, c. 646, 62 Stat. 933, 28 U.S.C.A. § 1346(a), as amended, seeking review of the final decision of the Commissioner of Internal Revenue denying its claim for a refund of federal estate taxes alleged to have been illegally and erroneously assessed and collected. Subsequent to the filing of defendant's answer to plaintiff's complaint, both parties filed cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, which matter is now before this court.

 The issue before this court arises under Section 2055 of the Internal Revenue Code, Act of August 16, 1954, c. 736, 68A Stat. 390, 26 U.S.C.A. § 2055, as amended, and the Regulations relating thereto.

 The dispute involved herein as submitted to the court arises out of the following stipulation of facts:

 Plaintiff, McDowell National Bank of Sharon, Pennsylvania, is the Trustee under an Irrevocable Trust Agreement executed on November 20, 1961, between McDowell and Louis J. Wiesen, deceased.

 Mr. Wiesen died on December 20, 1969, and was survived by the following life beneficiaries of said Trust: his wife, Virginia P. Wiesen, 75 years of age at the time of his death; his son, John W. Wiesen, 47 years of age at the time of his death; his sister, Martha W. Daley, 69 years of age at the time of his death and his brother-in-law, Eugene O. Daley, 72 years of age at the time of his death.

 Mr. Wiesen's Trust provided for the establishment of two separate funds at his death. First, a Marital Trust Fund, which was fully funded in accordance with the provisions of the trust agreement, and second, a Charitable Trust Fund which was to receive the balance of the assets remaining in the trust following distribution of the value of the full marital deduction, less any estate taxes due.

 In addition to the Trustee's powers under the law, certain discretionary powers were also granted to the Trustee by the Trust Agreement, and are set forth in part as follows:

 
"Article V . . .
 
"Trustee is authorized and empowered . . .
 
"1. To retain, . . . and to purchase . . ., any property, real, personal, or mixed, whether or not such property is authorized for investment by law, or is unsecured, unproductive, or of a wasting nature, all without diversification as to kind and amount.
 
* * *
 
"12. To manage, invest and re-invest the trust CORPUS and the TRUST FUNDS thereof, . . . in any stocks, shares, bonds, notes, debenture, trust certificate, participations or other securities, investment, or property, real, personal or mixed, . . . without regard for any limitation of investments now or hereafter defined by law as mandatory for Trustees in making investments ...

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