Arthur Goldberg

“ In both instances, the testator, by directing that payment be made of debts chargeable to another or to non-estate property, reduces his net estate and in effect confers a gift or bequest upon another. We believe that the provisions of § 812 (b) , like those of § 812 (e) providing the marital deduction, must be read in light of the general policies of taxing the transmission of wealth at death and of equalizing the tax treatment of couples in common-law and in community property jurisdictions. ”

“ In our view the payments made as a result of the testator's assumption of responsibility both for his wife's share of the community debts and for her share of the administration expenses are more properly characterized as material gifts rather than as 'claims' or 'expenses.' Since these gifts were to the surviving spouse, respondents contend that a marital deduction should be allowed. ”

“ Respondents contend that 'incumbrance or obligation' refers only to 'a payment to be made out of property passing to the surviving spouse.' Respondents' narrow construction certainly is not compelled by a literal interpretation of the statutory language. Their construction would embrace only, for example, an obligation on the property passing whereas the statute speaks of an obligation 'with respect to the passing' gift. ”

“ If it is found in a given case that an interest or right created by local law was the object intended to be taxed, the federal law must prevail no matter what name is given to the interest or right by state law.' See Hart and Wechsler, The Federal Courts and the Federal System (1953) , pp. 456-457.↑ See, e.g., Lowndes and Kramer, op. cit., supra, note 10, §§ 1.2, 2.2.↑ The majority of the Court of Appeals passed over the adequate-consideration provision because 'the debts here were in the main for income taxes and ad valorem taxes, debts imposed by law.' 309 F.2d 592, 596. ”