Under a will, the testator's entire estate was left in trust for
his 85-year-old mother during her lifetime, after which certain
specific bequests were made and the residue of the estate was to be
divided equally among four named charities. The trustees were
directed to pay the mother a stated monthly income, even if it
should become necessary to invade the corpus of the trust, were
further authorized to utilize any portion of the corpus for her
"pleasure, comfort, and welfare," and were admonished that the
"first object to be accomplished" was to provide for her "in such
manner as she may desire." She died three years later without
invading the corpus of the trust.
under § 812(d) of the Internal Revenue Code, the
charitable bequests were not deductible from the gross estate for
estate tax purposes. Merchants Bank v. Commissioner,
320 U. S. 256
335 U. S.
166 F.2d 993, reversed.
A federal district court dismissed a suit for refund of federal
estate taxes. 74 F. Supp. 113. The Court of Appeals reversed. 166
F.2d 993. This Court granted certiorari. 335 U.S. 811.
p. 335 U. S.
Respondents are the executors and trustees of the estate of
William Bate Williams. They brought this
Page 335 U. S. 596
action for refund, with interest, of $35,899.12 of federal
estate taxes and interest paid under protest. The relevant facts,
set forth in respondents' complaint and admitted by the Collector's
motion to dismiss, are as follows:
William Bate Williams died in 1943. Under the terms of his will,
the entire gross estate of $508,411.17 was bequeathed to
respondents to hold in trust for the testator's
"beloved mother, Elizabeth Bate Williams, for and during her
natural life, with the full power and authority herein
"I hereby direct both my executors and my trustees to pay to my
mother the sum of Seven Hundred Fifty (750.00) Dollars a month to
be used by her as she sees fit. In the event the income from my
estate is not sufficient to pay the said Seven Hundred Fifty
($750.00) Dollars each month, then my executors and trustees are
hereby empowered, authorized, and directed to encroach on the
corpus of the estate to pay said amount and to sell any of my
property, real or personal, for this purpose."
"In addition to this amount, my said executors and trustees are
authorized and empowered to use and expend in their discretion any
portion of my estate, either income or principal, for the pleasure,
comfort and welfare of my mother."
"The first object to be accomplished in the administration and
management of my estate and this trust is to take care of and
provide for my mother in such manner as she may desire, and my
executors and trustees are fully authorized and likewise directed
to manage my estate primarily for this purpose."
The will went on to provide for distribution of the corpus of
the estate remaining at the mother's death. Twenty-five percent of
the total remaining estate was bequeathed to the testator's cousin,
and stated sums in
Page 335 U. S. 597
cash were left to other named legatees. After these legacies,
the balance of the estate was directed to be paid over to four
named charities in equal shares.
At the time of the testator's death, the estate was earning a
net income of approximately $15,000 per year, $6,000 more than the
amount directed to be paid at $750 per month, to the testator's
mother. The mother at that time was eighty-five years old, lived on
substantially less than $750 per month, and had independent
investments worth approximately $100,000 which netted her an income
of about $300 per month. A woman of moderate needs and without
dependents, she died three years later without having requested
respondents to invade the trust corpus in her behalf.
The disputed estate tax liability resulted from respondents'
attempt to deduct from the gross estate the portion bequeathed to
the four charities, in reliance on the charitable deduction
provision of § 812(d) of the Internal Revenue Code. [Footnote 1
] The Commissioner denied the
deduction. The Collector here resists the refund claim on the
ground that the possibility of invasion of the corpus on behalf of
the testator's mother prevented the ultimate charitable interest at
the testator's death from being "presently ascertainable, and hence
severable from the interest in favor of the private use," within
the meaning of the applicable Treasury Regulation. [Footnote 2
Page 335 U. S. 598
On the authority of Merchants Nat. Bank of Boston v.
Commissioner, 320 U. S. 256
District Court granted the Collector's motion to dismiss. 74 F.
Supp. 113. The Court of Appeals reversed. 166 F.2d 993. It held
that, notwithstanding the language of the testamentary provision
for the "pleasure, comfort and welfare" of the mother, the
complaint's allegations of the mother's great age, independent
means, and modest tastes raised a triable issue of fact as to
whether the trust corpus was threatened with invasion, and the
charitable interest hence subject to depletion in favor of the
We agree with the District Court that this case is governed by
the decision in the Merchants Nat. Bank of Boston
and that the suit should be dismissed. It is apparent on the face
of the complaint that this testator's will did not limit the
trustees' disbursements to conformity with some ready standard --
as where, for example, trustees are to provide the prime
beneficiary with such sums as "may be necessary to suitably
maintain her in as much comfort as she now enjoys." Ithaca
Trust Co. v. United States, 279 U. S. 151
279 U. S. 154
The stated income here directed to be paid to the mother was "to be
used by her as she sees fit." Beyond this, the trustees were
empowered to invade or wholly utilize the corpus of the estate for
the mother's "pleasure, comfort and welfare," bearing in mind the
testator's injunction that "The first object to be accomplished . .
. is to take care of and provide for my mother in such manner as
she may desire. . . ." [Footnote
Page 335 U. S. 599
As in the Merchants Nat. Bank of Boston
case, where the
trustees had discretion to disburse sums for the "comfort, support,
maintenance, and/or happiness" of the prime beneficiary, so here we
think it the
"salient fact . . . that the purposes for which the widow could,
and might wish to have the funds spent do not lend themselves to
320 U. S. 320
256, 320 U. S.
We do not overlook the unlikelihood that a woman of the mother's
age and circumstances would abandon her customary frugality and
squander her son's wealth. But, though there may have been little
chance of that extravagance which would waste a part or consume the
whole of the charitable interest, that chance remained. What common
experience might regard as remote in the generality of cases may
nonetheless be beyond the realm of precise prediction in the single
instance. The contingency which would have diminished or destroyed
the charitable interest here considered might well have been
insured against, but such an arithmetic generalization of
experience would not have made this charitable interest "presently
"Rough guesses, approximations,
Page 335 U. S. 600
or even the relatively accurate valuations on which the market
place might be willing to act are not sufficient."
Merchants Nat. Bank of Boston v. Commissioner, supra,
at 320 U. S.
Nor do we think it significant that the trust corpus was intact
at the mother's death, for the test of present ascertainability of
the ultimate charitable interest is applied "at the death of the
The charitable deduction is a matter of
congressional grace, and it is for Congress to determine the
advisability of permitting amendment of estate tax returns at such
time as the probable vesting of the charitable interest has reduced
itself to unalterable fact.
MR. JUSTICE DOUGLAS and MR. JUSTICE JACKSON dissent upon the
grounds stated in dissent in Merchants Nat. Bank of Boston v.
Commissioner, 320 U. S. 256
320 U. S.
26 U.S.C. § 812(d), 53 Stat. 124, 125, as amended by Revenue Act
of 1942, § 408(a), 56 Stat. 949, and Revenue Act of 1943, § 511(a),
58 Stat. 74, 75.
"If a trust is created for both a charitable and a private
purpose, deduction may be taken of the value of the beneficial
interest in favor of the former only insofar as such interest is
presently ascertainable, and hence severable from the interest in
favor of the private use. . . ."
U.S.Treas.Reg. 105 § 81.44 (1942). Cf. id.
"If the legatee, devisee, donee, or trustee is empowered to
divert the property or fund, in whole or in part, to a use or
purpose which would have rendered it, to the extent that it is
subject to such power, not deductible had it been directly so
bequeathed, devised, or given by the decedent, deduction will be
limited to that portion, if any, of the property or fund which is
exempt from an exercise of such power."
In view of the express priority accorded the mother's wishes,
respondents' fiduciary duty to the ultimate beneficiaries, private
and charitable, was ineffective to guarantee preservation of any
predictable fraction of the corpus for disposition after the
mother's death. The testator, indeed, made the gifts to charity
subordinate not only to his mother's interest but to that of all
the private beneficiaries, stating in his will that the charitable
interest "is a residuary bequest . . . , and is not to infringe on
any of the other legacies hereinbefore provided."
". . . [T]he fundamental question in the case at bar is not
whether this contingent interest can be insured against or its
value guessed at, but what construction shall be given to a
statute. Did Congress, in providing for the determination of the
net estate taxable, intend that a deduction should be made for a
contingency the actual value of which cannot be determined from any
known data? Neither taxpayer nor revenue officer -- even if
equipped with all the aid which the actuarial art can supply --
could do more than guess at the value of this contingency. It is
clear that Congress did not intend that a deduction should be made
for a contingent gift of that character."
Humes v. United States, 276 U.
, 276 U. S. 494
MR. JUSTICE FRANKFURTER, dissenting.
Wisdom too often never comes, and so one ought not to reject it
merely because it comes late. Since I now realize that I should
have joined the dissenters in the Merchants Nat. Bank of
case, 320 U. S. 256
shall not compound error by pushing that decision still farther. I
would affirm the judgment, substantially for the reasons given
below. 166 F.2d 993.