Estate of Wall v. Commissioner
United States Tax Court
101 T.C. 300 (1993)
Helen Wall established multiple irrevocable trusts in which a corporation was trustee. The corporation was to distribute principal and income to a trust beneficiary with no real standard of direction in doing so. Wall retained the right to replace the corporate trustee with another corporate trustee, which was required to be independent from Wall. After Wall’s death, the government (defendant) asserted that Wall’s ability to replace the trustee constituted retained control over the trust property sufficient for it be calculated as part of her gross estate. Wall’s estate (plaintiff) appealed that decision of the IRS commissioner, arguing that being able to switch between disinterested corporate trustees was not actually retained control over the trust property because the trustee’s fiduciary duty lay with the beneficiary, not with the settlor. In the absence of some sort of fraudulent outside deal between Wall and the trustee, Wall would have no power to impact the timing and extent of distributions. In a 1979 revenue ruling, the IRS had previously held that in a situation like that of Wall, the trust grantor did retain control over the trust because she could threaten or cajole the trustee into handling the trust corpus exactly as the grantor wished. However, the Internal Revenue Code section that governed retained estates from a grantor had been construed to apply only to legally ascertainable and enforceable powers.
Rule of Law
Holding and Reasoning (Nims, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 723,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 723,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,500 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.