Wiley Blount Rutledge

Name: Fondren v. Commissioner of Internal Revenue — Opinion of the Court
Author: Wiley Blount Rutledge

Fondren v. Commissioner of Internal Revenue…

Summary

“Fondren v. Commissioner of Internal Revenue — Opinion of the Court”, is a work by Wiley Blount Rutledge. It explores elements such as trust, beneficiary and gift.

Quotes from Fondren v. Commissioner of Internal Revenue… (Wiley Blount Rutledge)

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ So far as the argument turns on the motive of the donors, it may be answered that the statute and the regulation make no such test. If motive has bearing, it is only by reason of its effect upon the element of time and whatever relation may be given, by the particular terms of the gift, to it and the disclosing of a purpose to provide for or against immediate enjoyment. The statute in this respect purports to make no distinction between gifts to minors and gifts to adults. If there is deferment in either case the exemption is denied. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ A fortiori, if income is to be accumulated and paid over with the corpus at a later time, the entire gift is of a future interest, [3] although upon specified contingency some portion or all of the fund may be paid over earlier. [4] The contingency may be the exercise of the trustee's discretion, either absolute or contingent. [5] It may also be the need of the beneficiary, not existing when the trust or gift takes effect legally, but arising later upon anticipated though unexpected conditions, either to create a duty in the trustee to pay over or to permit him to do so in his discretion. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ But the regulation, adopted almost in the language of the committee reports, [11] does not limit the denial of the exception to instances where the deferment of enjoyment is at all events for a period which is definite and certain. Cf. Commissioner v. Glos, 7 Cir., 123 F.2d 548, 550. Clearly the statute is not to be applied differently, to grant or deny the exemption, if there is postponement, merely because in one case the period is under any eventuality for a certain, specified length of time, whereas in another it is of uncertain or indefinite length. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ Finally it is urged that unless these gifts are to be taken as conferring the right to immediate enjoyment, no gift for the benefit of a child of tender years can be so regarded since in any such case 'some competent person must be the primary judge as to the necessity and extent of reasonable requirements of the beneficiary.' The argument is appealing, in so far as it seeks to avoid imputing to Congress the intention to 'penalize gifts to minors merely because the legal disability of their years precludes them for a time from receiving their income in hand currently.' Cf. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ Consequently in this case the donors' laudable desire to make provision for their grandchildren in case of future need cannot nullify the deferment which the recited absence of present need, coupled with the terms of the trust, brought about. Again, contingency of need in the future is not identical with the fact of need presently existing. And a gift effective only for the former situation is not effective, for purposes of relief from the tax, as if the latter were specified, whether the donee is an adult or a minor. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ Aware of the uncertainties of our world, however, the donors directed in Article 3:
'* * * (T) he Trustee shall provide for the support, maintenance and education of our said Grandson, using only the income of said estate for the purpose if it be sufficient. If it be necessary to use any of the corpus of the estate for that purpose and in the judgment of the Trustee it is best to do so, said Trustee may make advancements out of the corpus of said trust estate for such purpose for the benefit of our said Grandson. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ Whether the disposition is in his judgment entirely, as the first clause indicates, or under the second is so only with reference to how much of the fund may be needed, [8] the trustee cannot act in any case to apply corpus or income for the support, maintenance and education of the beneficiary until necessity arises. ”

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Source: Wikisource

Wiley Blount Rutledge, Fondren v. Commissioner of Internal Revenue…

“ The graduated scale of payments, beginning at age twenty-five and ending at thirty-five, together with the prohibition of payment earlier except in case of necessity, shows principal concern for a period of adult life. ”

Wiley Blount Rutledge

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