Felix Frankfurter

“ A transfer can only take effect, within the meaning of the statute, by the shifting of possession or enjoyment from the decedent to living persons. The fact that the terms of the gift bring about some other effect at the decedent's death is immaterial. The fact that something may happen in respect of the beneficial enjoyment of the property conditioned upon the decedent's death is irrelevant so long as that something is not the shifting of possession or beneficial enjoyment from the decedent. ”

“ All involve dispositions of property by way of trust in which the settlement provides for return or reversion of the corpus to the donor upon a contingency terminable at his death. Whether the transfer made by the decedent in his lifetime is 'intended to take effect in possession or enjoyment at or after his death' by reason of that which he retained, is the crux of the problem. ”

“ If what A does is to transfer his property irrevocably, with provision that it shall be enjoyed successively by various persons for life and then go absolutely to a named person, but that if he, A, shall outlive that person, the property shall come back to him, and A dies in the lifetime of the person in question, A has merely lost the chance that the beneficial ownership of the property may revert to him. ”

“ If there ever was an instance in which the doctrine of stare decisis should govern, this is it. Aside from the obvious hardship involved in treating the taxpayers in the present cases differently from many others whose cases have been decided or closed in accordance with the settled rule, there are the weightier considerations that the judgments now rendered disappoint the just expectations of those who have acted in reliance upon the uniform construction of the statute by this and all other federal tribunals ”

“ Louis Trust cases, we cannot evade our own responsibility for reconsidering, in the light of further experience, the validity of distinctions which this Court has itself created. Our problem then is not that of rejecting a settled statutory construction. The real problem is whether a principle shall prevail over its later misapplications. ”

“ Louis Trust Co., supra, the decedent had conveyed property in trust, the income of which was to be paid to his daughter during her life, but at her death 'If the grantor still be living, the Trustee shall forthwith * * * transfer, pay, and deliver the entire estate to the grantor, to be his absolutely.' But 'If the grantor be then not living' then the income was to be devoted to the settlor's wife if she were living, and upon the death of both daughter and wife, if he were not living, the trust property was to go to the daughter's children, or if she left none, to the grantor's next of kin. ”

“ It rejected formal distinctions pertaining to the law of real property as irrelevant criteria in this field of taxation. 'Nothing is to be gained', it was said, 'by multiplying words in respect of the various niceties of the art of conveyancing or the law of contingent and vested remainders. It is perfectly plain that the death of the grantor was the indispensable and intended event which brought the larger estate into being for the grantee and effected its transmission from the dead to the living, thus satisfying the terms of the taxing act and justifying the tax imposed.' Klein v. ”

“ The next sentence: 'Nor should anything be included on account of a life estate in the decedent,' has been repeated in substance in the corresponding article of all subsequent regulations.
If by the will of his grandmother A is given a life estate, with remainder to another, his executor is not bound to return anything on account of the life estate because, in respect of it, nothing passes on A's death. The estate simply ceases. The Treasury has never contended the contrary. ”

“ If, on the other hand, A creates an estate for years or for life in B, retaining the remaining beneficial interest in the property for himself, and, whether by the terms of the grant, or by the terms of A's will, or under the intestate law, that remainder passes to someone else at his death, such passage renders the transfer taxable. ”

“ The confusion apt to be engendered by judicial forays into this field is well illustrated by the use of the term 'possibility of reverter' by the majority in Helvering v. St. Louis Union Trust Co., supra. 'A possibility of reverter' is traditionally defined as the interest remaining in a grantor who has conveyed a determinable fee. The definition has not been thought to have any relation to the reversionary interest of a grantor who has transferred either a vested or contingent remainder in fee. ”

“ Various considerations of parliamentary tactics and strategy might be suggested as reasons for the inaction of the Treasury and of Congress, but they would only be sufficient to indicate that we walk on quicksand when we try to find in the absence of corrective legislation a controlling legal principle. ”

“ Whatever the reason for the failure to amend § 302 (c) , whether hesitancy on the part of the Treasury to recommend such action, or the satisfaction of Congress with the construction put upon the section by this court, or mere inadvertence, the fact remains that the section has been reenacted again and again with the courts' construction plain for all to read.
4. As shown by the matter above quoted from the Treasury Regulations affecting the estate tax, [26] a contingent interest is not to be included in the taxable estate. ”

“ There are great diversities among the several states as to the conveyancing significance of like grants; sometimes in the same state there are conflicting lines of decision, one series ignoring the other. ”

“ We must put to one side questions that arise under sections of the estate tax law other than § 302 (c) -sections, that is, relating to transfers taking place at death. Section 302 (c) deals with property not technically passing at death but with interests theretofore created. The taxable event is a transfer inter vivos. But the measure of the tax is the value of the transferred property at the time when death brings it into enjoyment.
We turn to the cases which beget the difficulties. In Klein v. ”

“ In determining whether a taxable transfer becomes complete only at death we look to substance, not to form. * * * However we label the device it is but a means by which the gift is rendered incomplete until the donor's death.' 296 U.S. at page 47, 56 S.Ct. at page 78, 80 L.Ed. 29, 100 A.L.R. 1239. For the majority in the St. Louis Trust Company cases, these practicalities had less significance than the formal categories of property law. The grantor's death, the majority said, in Helvering v. ”