243 Mass. 523 | Mass. | 1923
T. Jefferson Coolidge, on February 12, 1913, executed a deed of trust to the petitioners, by which instrument he transferred certain securities in trust for payment of income to his children and the issue of his son and daughter. By the fifth paragraph of the instrument it was provided that upon the death of the last survivor of the donor’s children, grandchildren or great-grandchildren who should be living at his death, or upon the attainment of fifty years by the youngest surviving grandchild of the donor, living at his death, “whichever shall first happen,” the capital of the trust fund was to be paid over in equal shares to and among his issue living at that time per stirpes and not per capita, and thereupon the trust established should cease and determine. By the ninth paragraph the donor reserved to himself the power to make additions to the trust fund, to change or alter any or all of the trusts, and to declare “new uses and trusts of the property in any way or manner except such as will vest in myself the trust property or any beneficial interest therein;” and also, to name and appoint other persons as beneficiaries by way of addition or substitution, and to appoint other trustees, every such change or appointment to be made by deed, to take effect immediately upon delivery thereof “to any person who shall at the time be acting as a trustee.”
Since the date of the trust instrument the petitioners as trustees have held both the legal title to and the possession of all the property conveyed by the deed of trust, and have administered the same as trustees for the purposes of the trust and in accordance with the terms expressed in the deed. The donor died in 1920. In November, 1921, by reason of his death, succession taxes were assessed to the petitioners upon account of certain life interests of his daughters and grandchildren in the property, as set forth in the petition. In the Probate Court the tax was abated and the respondent appealed.
By the deed of trust the donor divested himself of all his title to the securities conveyed. He reserved the right to appoint other persons than those named as beneficiaries and to declare new uses or trusts, but it was expressly stipulated that no change could be made so as to vest in the donor the trust property, or any beneficial interest therein. By paragraph five the trust was to terminate, not upon the death of the donor, but upon the death of the last surviving of those of his children, grandchildren and great-grandchildren living at the donor’s death, or upon the attainment of fifty years by the youngest grandchild living at his death. Unless the enjoyment or possession of the property conveyed was contingent upon the donor’s death, its passing was not taxable, and if it vested in the beneficiaries during the lifetime of the grantor, it did not pass by deed intended to take effect in possession or enjoyment after his death.
In Crocker v. Shaw, 174 Mass. 266, by the terms of a trust, upon the death of one of the donors the principal was to be paid as she should by law appoint. It was held that the passing of the property by deed intended to take effect after the death of the grantor was taxable. In the course of the opinion it was said: “We see no difference in principle between property passing by deed intended to take effect in possession or enjoyment on the death of the grantor and property passing by will. In either case it is the privilege of disposing of property after the death of the grantor or testator and of succeeding to it which is taxed.”
In the case at bar the beneficial interest in the property conveyed by the trust deed of February 12, 1913, vested in the beneficiaries at the time of the delivery of the deed to the trustees. Their interest was created by this deed. They were from that date in possession and enjoyment of the property, and such possession and enjoyment were not in any way contingent on the donor’s death. The rights of the life tenants and remaindermen were determined by the instrument of trust and continued to the same extent after the donor’s death as before. His intention is shown by this deed; and the beneficial interest in the enjoyment of the proceeds of the trust passed at the time of its execution.
The donor reserved no beneficial interest in the estate. He did, however, reserve the right to divest the donees of their interest; but he did not see .fit to use this power. In our opinion, the mere existence of such a right unexercised, does not affect the vesting of the property passing by the trust deed. The possession and enjoyment of the property in the beneficiaries were created by the instrument of trust. The donor parted with the possession and beneficial interest by the execution of this instrument, and the unused power of revocation does not deprive the beneficiaries of their interest, or make it contingent on the donor’s death. The
The possession and enjoyment vested in the beneficiaries when the trust deed was delivered to the trustees. The deed passed the property from the donor and gave to the beneficiaries at that time the beneficial interest in it, and their enjoyment and possession of it was not contingent on the death of the donor. The transaction does not come within the meaning of the statute, as property passing by deed made or intended to take effect in possession or enjoyment after the death of the grantor. The decree of the Probate Corut is affirmed.
So ordered.