Harold Hitz Burton

“ The language of the instrument, therefore, certainly did not, in itself, require the property which was transferred, in 1920, to be included, in 1940, in the setlor's gross estate for federal estate tax purposes. If anything, the language itself, read in the light of Illinois law as stated above in the discussion of the third proposal and as regarded by the settlor in the light of the advice of his legal counsel, is expressive of an intent that there be no possibility of a reverter, and of an intent to make an absolute and complete transfer to the trustees in praesenti. ”

“ The remoteness of it is obvious from the fact that, even at the time of the execution of the trust when the chances of its realization were at their highest point, the possible reverter to the settlor was conceivable only if all three of the children of the settlor were to die before he did and were to die without descendants of their own. ”

“ In such a case, since the entire beneficial in erest, subject to the preceding life estate in the other beneficiary, vested in the beneficiary entitled in remainder absolutely at the time of the creation of the trust, it would seem that the trust does not fail on his death, so as to give rise to a resulting trust, but his interest passes to the state as ultimus haeres. ”

“ If the 1920 trust instrument had named as its sole beneficiary a person having a comparatively short life expectancy, then, assuming a reversion in favor of the settlor under Illinois law, the possibility of its occurrence would have been substantial. ”

“ There is nothing in it to suggest that the settlor, even as a sole surviving trustee, would be free from strict accountability to the beneficiaries of the trust or from an obligation to use his discretion in their interest rather than in his own. There is no more of an express provision in this trust for the possobility of a reverter to the settlor than there was in the Reinecke case. ”

“ Said grantor has created the foregoing trusts to provide for the support and maintenance of the beneficiaries entitled to share in the income of said trust estate, and the said beneficiaries shall have no power to anticipate, assign, or otherwise dispose of or encumber their respective interests in said trust estate, and the same shall not be subject to be taken from them by process of law. ”

“ If Congress had intended to sweep into the gross estate of the decedent broad classifications of transfers inter vivos, contrary to the limitations upheld in Reinecke v. Northern Trust Co., supra, or as would result from the application of the doctrine of Helvering v. Clifford, many of the foregoing specific extensions would not have been necessary. ”

“ The inherent difficulty of administration and the resulting inequality of taxation as between instruments governed by the laws of different states argue strongly against such a policy.
This Court, as a settled practice, places much reliance upon announcements by Courts of Appeals as to the law of the states within their respective Circuits. [7] The weight to which such announcements are entitled will vary with the circumstances under which they are made. ”

“ The computations showed that the probability that a person of the age of this settlor would survive three persons of the respective ages of the primary beneficiaries who were living at the date of the creation of this trust was only 0.01612, or about 1 1/2 chances out of 100. Similarly, the value of the right of a person, of the age of the settlor in 1920, to receive $1 on the death of the last of three persons of the ages of the primary beneficiaries was $0.00390. ”

“ To exercise the voting power upon all shares of stock held by the trustee hereunder, and to exercise every power, election, and discretion, give every notice, make every demand, and do every act and thing in respect of any shares of stock or bonds, or other obligations and securities held by the trustee hereunder, which it might or could do if it were the absolute owner thereof ”

“ The difficulty of applying that test as the sole basis of exemption is, however, obvious. On the other hand, this element of remoteness provides a thoroughly reasonable consideration which may be combined with other evidence to determine the presence or absence of the factual intent on the part of the settlor which is discussed in the fifth and final proposal. ”