City Bank Farmers Trust Co. v. McGowan
323 U.S. 594 (1945)

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U.S. Supreme Court

City Bank Farmers Trust Co. v. McGowan, 323 U.S. 594 (1945)

City Bank Farmers Trust Co. v. McGowan

No. 294

Argued January 4, 1945

Decided January 29, 1945

323 U.S. 594


1. Section 302(c) of the Revenue Act of 1926, as amended, which, for the purpose of the federal estate tax, requires inclusion, in the gross estate of a decedent, of any interest in property of which "the decedent has at any time made a transfer . . . in contemplation of . . . his death," held applicable to a transfer of property of an incompetent person, effected by order of a court acting in lieu of the incompetent. P. 323 U. S. 598.

2. A transfer is "in contemplation of death," within the meaning of § 302(c), where the thought of death is the impelling cause of the transfer. United States v. Wells, 283 U. S. 102. P. 323 U. S. 599.

3. Where, by court order, annual allowances were made out of the surplus income of an incompetent person, over seventy years of age and incurably insane, to descendants who would inherit the incompetent's property, and where the dominating reason for the allowances was that the beneficiaries would eventually divide the estate, held that the annual allowances -- to the extent that they exceeded an amount which the incompetent, for some years prior to adjudication of incompetency, had regularly allowed -- were made "in contemplation of death" within the meaning of § 302(c). P 323 U. S. 599.

4. Allowances made by court order out of the surplus income of an incompetent person to collateral relations, who would inherit no part of the incompetent's property and who were in need of funds for their maintenance and support, held not made "in contemplation of death" within the meaning of § 302(c). P. 323 U. S. 600.

142 F.2d 599 reversed in part.

Certiorari, post, p. 689, to review the affirmance of a judgment, 43 F.Supp. 790, which allowed recovery in part in a suit for refund of federal estate taxes.

Page 323 U. S. 595

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