315 Mass. 639 | Mass. | 1944
This petition is brought under G. L. (Ter. Ed.) c. 65, § 30, by the trustee named in a trust indenture between James B. Hill and the petitioner, executed on May 22, 1935, whereby Hill transferred certain securities to the petitioner in trust to pay the income to Hill’s wife during her life and from and after her decease to pay to Hill’s son the income and such portions of the principal “as the Trustee may deem necessary in order to secure his comfort, maintenance and support.” Upon the decease of the survivor of the wife and son, the principal is to be distributed among the then living issue of the son, and in default of such issue, in equal shares among such of fourteen nieces and-nephews of Hill and of his wife as shall then be living. There are spendthrift provisions for the protection of the beneficiaries. Hill died May 21, 1937, just one day less than two years after the execution of the indenture. The object of the petition is to determine whether any succession tax is due with respect to the in
Section 1, as it read at the time of the transfer, and in its present amended form, provides in part that property “which shall pass by will, or by laws regulating intestate succession, or by deed, grant or gift, except in cases of a bona fide purchase for full consideration in money or money’s worth, made in contemplation of the death of the grantor or donor ... to any person, absolutely or in trust . . . shall be subject to a tax . . ..” Section 3 at the time of the transfer read as follows: “Any deed, grant or gift completed inter vivos, except in cases of bona fide purchase for full consideration in money or money’s worth, made not more than six months prior to the death of the grantor or donor, shall, prima facie, be deemed to have been made in contemplation of the death of the grantor or donor. Notwithstanding any provision of section one, no tax shall be payable thereunder on account of any deed, grant or gift in contemplation of death made more than two years prior to the death of the grantor or donor, unless made or intended to take effect in possession or enjoyment after such death.” A subsequent amendment by St. 1939, c. 380, has changed the period during which the transfer is prima facie deemed to have been made in contemplation of death from six months prior to the death of the grantor to one year prior thereto. Since the transfer from Hill to the petitioner in trust was made more than six months and less than two years prior to Hill’s death, the question is simply one of fact whether Hill made it in contemplation of his own death. The commissioner of corporations and taxation contends that Hill did make the transfer in contemplation' of his death, and therefore that it is taxable. The judge of probate found that it was not made in contemplation of death, but was made “for purposes desirable to . . . [Hill] and [sic] had he continued to live and not associated with contemplation of his own death,” and ruled that no tax was due.
This is not an appeal from a determination of value. See G. L. (Ter. Ed.) c. 65, § 25. Nor is it a petition for abatement under § 27. It is an independent proceeding brought
This court has not been called upon hitherto to construe the meaning of the words “made in contemplation of the death of the grantor or donor” and “in contemplation of death” as they appear in G. L. (Ter. Ed.) c. 65, §§ 1 and 3. But the Supreme Court of the United States, speaking through Chief Justice Hughes, in United States v. Wells, 283 U. S. 102, has exhaustively considered the meaning of the words “in contemplation of death” in connection with the Federal- estate tax. See now U. S. C. (1940 ed.) Title 26, § 811 (c). In United States v. Wells it was held that the dominant purpose in taxing transfers in contemplation of death-is “to reach substitutes for testamentary dispositions and thus to prevent the evasion of the estate tax” (pages 116-117); that “the reference is not to the general expectation of death which all entertain” (page 115); that there must be “a particular concern, giving rise to a definite motive” (page 115), which “must be of the sort which leads to testamentary disposition” (page 117); that the test is “always tó be found in motive” (page 117); that the existence or nonexistence of a condition of health that naturally gives rise to the feeling that death is near is of great but not necessarily of decisive importance (page 117);
With the foregoing interpretation in mind we turn to further facts of the case before us. The evidence is reported. The judge made no express findings of subsidiary facts. At the hearing the commissioner of corporations and taxation introduced the trust indenture, a will executed by Hill on the same day as the indenture, the trustee’s and executor’s inventories, and the death certificates of Hill and his wife, and then rested. The petitioner thereupon introduced oral testimony from Hill’s son, his physician, his housekeeper, and others, all of which appears credible and the substance of which was not contradicted. This testimony tended to favor the petitioner. In an equity or probate appeal, where the evidence is reported, it is our duty to examine it and to reach our own conclusions upon it, but where the credibility of witnesses who have testified orally is involved we accept the findings of the trial judge unless they are plainly wrong. Where, however, an ultimate finding rests upon inferences.
Hill was eighty-seven years and nine months of age when he executed the indenture. For about forty years his only business had been speculating in the stock market, in which he had made his fortune. Notwithstanding his age, there was much evidence that he enjoyed extraordinarily good health. He was physically active, erect in carriage, and agile in step. He had hardly any gray hair. His eyesight and hearing were good. He arose at seven o’clock in the morning. He shaved himself. He mowed his lawn himself. He walked about the neighborhood and to church. He made out his checks and paid his bills. He made his own income tax returns. He enjoyed a good appetite. He was fond of cards and played well. He read the newspapers and still closely followed the stock market, although he was no longer the active trader that he had formerly been. He used the trolley cars in going in and out of town. He dressed well. He was cheerful in temperament and inclined to boast a little of his good health. He did not talk of death. He appeared much younger than he was. Although for many
It is not easy to determine with certainty whether Hill’s dominating motive for executing the indenture was to secure the advantages of the trust during his lifetime or to make a partial disposition of his property in anticipation of death. It is possible that his true reasons for making the indenture have not been fully disclosed. The weight that would ordinarily be given to his advanced years is largely offset by his unusual good health and his seeming lack of apprehension of approaching death. The desire to be rid of the annoyance of managing a trading account with a stockbroker and to save income taxes are motives associated with continued living. They may have operated powerfully upon a man in Hill’s position. It is true that he included in the trust securities that were not in his broker’s account, and that he still retained in his own hands and management the larger part of his property. But these are matters of detail. He would still be saved a substantial burden in the matter of watching investments. The retention of the larger part of his fortune in his own control is consistent with a continued expectation of life. He was entirely relieved of his broker’s account. The reason he himself gave for making the indenture, the evidence of which we must assume the judge believed, is entitled to great weight. Motives having reference to continued living are not lacking in the dispositions made in the indenture. Hill’s wife was an invalid. We do not know that she had any property of her own. He might become wholly incapacitated. She would receive the income during his life. Protection of his wife during the remainder of his life by means of a substantial fund in the hands of a trustee in which he had confidence, guarded against risks that might be created either by him or by her, may have been an influential consideration in his mind. If the wife died before Hill did, his son would likewise receive protection, and his financial position would be securely established during the remainder of Hill’s life. The fact that the dispositions made
Hill’s advanced age of course cannot be overlooked. But even aged men, especially if enjoying good health, do not commonly go about their business under the mental shadow of death. It would be risky to decide upon age alone. Generally there will be other factors. There are other factors here, but in view of the limitations to which we have previously-adverted under which we must act in dealing with facts already passed upon by the Probate Court, we are not satisfied that the commissioner has sustained the burden which rests upon him of proving that the inference ought to be drawn that Hill’s preponderating motive originated in contemplation of death. It is the predominating motive that prevails. First Trust & Deposit Co. v. Shaughnessy, 134 Fed. (2d) 940, 942.
42Decree affirmed.