209 Wis. 162 | Wis. | 1932
The record discloses a discharge of filial duty that is commendable and disarming. The devotion
The facts are simple; but a very able argument is made in support of the proposition that under the conceded facts there was an absolute and irrevocable gift in the form of a valid deed or trust, and that therefore to levy an inheritance or transfer tax thereon is an unwarranted interference with vested rights. A review of cases cited and relied on by appellant causes us to observe that a technical analysis of each step in the sequence of events leading up to and ending in the “possession and enjoyment” by appellant of the property transferred to her warrants the earnestness of counsel, although we reach the same conclusion the trial court did.
The difficulties experienced in building up this system of taxation, making it equitable and at the same time prevent
The transaction with which we are here concerned took place when the law of this state provided for the imposition of a tax upon transfers of property in trust or otherwise, and intended to take effect in possession or enjoyment at or after such death. The statutory language suggests that the test of taxability is the time when the interest takes effect in possession or enjoyment, and if that occurs at or after the death of the donor, then the succession to the interest is taxable. In cases where there is a deed absolute on its face, made with such an understanding as exists in this case, in order to impose the tax there may seem to be some departure from property concepts developed prior to the passage and without consideration of tax laws of this character. But a tax such as is provided for in the statutes is an approved and accepted method of distributing the burden of raising money for governmental purposes. In 4 Cooley on Taxation (4th ed.) § 1722, there is pointed out a distinction between an estate tax and an inheritance
Under the facts and circumstances which condition the transaction, it is not at all difficult to reach the conclusion that the donor and donee created for the donee an interest which, under the complete terms of the transfer, could vest in possession and enjoyment only at or after the donor’s death. Then and then, only was there a shifting of the economic use and benefit of the property to the donee. A ■tax is laid on the right to become beneficially entitled to property on the death of the former owner. The donor in life had the property as completely under his control so far as its earnings are concerned, and could do with it that which might inure to his own benefit without consideration of others, as if the gift had not been made. The agreement which was made and lived up to by the donee was that she was to have no control over or interest in the fruits of the property until her father’s death; that his word in relation thereto was to control. In the decisions interpreting statutes of this character the general holding is that where the right to possession and enjoyment is suspended until the donor’s death the interest does not reach the donee until
The case at bar is within the rule followed in Estate of Waite, 208 Wis. 307, 242 N. W. 173, in which a deed or gift which provided for the retaining of the income from the property by the donor during his life was held to create a taxable interest on the death of the grantor. An arrangement is not effective in taking the case out of the reach of the statute (sec. 72.01, Stats.) under which arrangement or agreement the income' from and the management of the property transferred is".retained for the benefit of the donor by an original agreement between himself and the donee. Will of Prange, 201 Wis. 636, 231 N. W. 271. It seems that a case for taxability is complete. Any other holding would be recognizing indirect methods of testamentary disposition as valid and not taxable. The mere difference in the form of the promise by which the donee assumes obligations cannot be controlling. In order to escape the tax in this state the transfer must pass property from the trans-feror with all the attributes of ownership independently of his death. The element which makes the rule applicable is the intention of the donor, and this may be shown as well by an oral understanding or agreement as by a reservation formally and effectively expressed in the deed. People v. Moir, 207 Ill. 190, 69 N. E. 905; Kelly v. Woolsey, 177 Cal. 325, 170 Pac. 837. See note in 49 A. L. R. 866; Ross, Inheritance Taxation, § 112.
Appellant’s proposition that to levy an inheritance transfer tax on an absolute and irrevocable gift in the form of a valid deed or trust is an interference with vested rights and in violation of the provisions of the Fifth and Fourteenth amendments to the United States constitution, even though the income arising from the corpus of the gift is
By the Court. — Order affirmed.