Estate of Chrysler v. Commissioner
United States Tax Court
44 T.C. 55 (1965)
Jack Chrysler established a pair of irrevocable trusts for the benefit of his two children. The trusts were identical other than the identity of the beneficiary. A corpus of $115,000 was provided for each, and the three trustees (none of whom were Chrysler) were directed to pay the annual net income of the trust to the respective child, and while the child was a minor, the trustees were to use the income for the maintenance, education, and support of the child. As of November 7, 1958, when Chrysler died, the fair market value of the trusts were $534,920.37 and $698,120.83 respectively, and they were included in Chrysler’s gross estate in his estate-tax filing. Chrysler’s estate (plaintiff) subsequently argued that the value of the two trusts should not have been included in his gross estate, because the irrevocable trusts relied solely on the judgment of the trustees in regard to expenditure of the money, which was intended to act in satisfaction of Chrysler’s legal duty to support his minor children. The government (defendant) argued that while Chrysler was clearly using the money to support his children, he could have availed himself of the ability to have the income distributed to himself, so the value of the trusts was properly included in Chrysler’s estate.
Rule of Law
Holding and Reasoning (Akundell, J.)
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