14 F. Supp. 523 | Ct. Cl. | 1936
The decedent, Charles W. Hunter,'died January 8, 1929, at the age of eighty-five years. The property in question was actually transferred by the decedent to seven of his nine children July 9, 1928, about five months prior to his death. However, he had endeavored in June, 1925, to transfer such property to trustees for the benefit of all of his children, which transfer was not completed by reason of a disagreement among the children as to the interests which they were to receive. The Commissioner of Internal Revenue determined that the property involved was transferred by the decedent in contemplation of death, and such determination must stand unless it is overcome by proof that the dominant motive of the decedent 'for making the transfer was other than contemplation of death. In our opinion the record not only fails to overcome the Commissioner’s determination, .but it requires the conclusion that the transfer in question was testamentary in character and was made in contemplation of death.
The decedent was in poor health in 1923 before he gave any serious consideration to the matter of transferring his property to his children. He went to Johns Hopkins Hospital August 3, 1923, where his condition was diagnosed as cerebrospinal syphilis and arteriosclerosis. He remained there under treatment until August 31, 1923, when he was discharged, without improvement of the illness with Which he was found to be afflicted. The decedent returned to his home in Memphis and his condition appears to have grown worse.
In the latter part of 1923 or early in 1924 the decedent began considering the transfer of all of his. property to his nine children. As a result of this deliberation, he executed a common-law trust on June 9, 1925, equally dividing his entire property among all of his children. This division of the property was objected to by one of the children with the result that the transfer was not consummated. The decedent left the matter of agreeing upon a substituted plan entirely to his children. The trust was finally revoked and in 1928 the decedent transferred all of his property, except an automobile and a life estate in the home in which he lived, to a corporation for stock. Six months later he transferred the entire stock of the corporation to his children without consideration in money or money’s worth in the proportions agreed upon among the children.
Plaintiff contends that the impelling motives for the transfer by the decedent of all of his property to the children were (1) to accomplish a fixed purpose and desire which he had as early as 1913 to retire from active business and to place the management of his business with his sons; (2) to relieve himself from worries and responsibilities; (3) to equalize his bounty among his children; (4) to continue his policy of making gifts in his lifetime so that the children might be independently established; and (5) to protect himself from possible judgments and lawsuits which might arise out of operation of his business. With reference to alleged motives (1) and (2), the facts disclose that the decedent had retired from active business and had placed the management thereof with his sons long prior to the time the transfers in question here were made. This thought therefore did not, we think,
For the foregoing reasons and upon the facts in this case, we are of opinion that the transfer made by the decedent July 9, 1928, of practically his entire estate was in lieu of a testamentary disposition and that such transfer was made in contemplation of death (finding 23). The plaintiff is therefore npt entitled to recover and the petition is dismissed. It is so ordered.