Neal v. Commissioner

Moeeis,

dissenting: I am unable to agree with the majority opinion that the evidence does not overcome the presumption that certain gifts made by the decedent within two years of his death were made in contemplation of death within the meaning of section 402 (c) of the Eevenue Act of 1921.

Contemplation of death is an apprehension of death within the reasonably near future from some existing bodily or mental condition and not the general expectation of ultimate death entertained by everyone, and such contemplation of death must be the motive which prompted the transfer and without which the transfer would not have been made, in order to include the transferred property in the estate of the decedent subject to tax. United States Trust Co. of New York, Executor, 14 B. T. A. 312. In Flannery v. Willcuts, 25 Fed. (2d) 951, the Circuit Court of Appeals for the Eighth Circuit used the following language:

We are also in accord with counsel’s statement in his brief that the cases “hold that the thought of death must be the actuating motive without which the gift would not have been made” adding thereto the qualification that the “ thought of death ” as an anticipation of the inevitable which we all realize is not within the statute; but to be within the statute the thought must arise because of some known infirmity which, it is believed, will likely cause death.

Examining the evidence in the instant proceeding to determine whether it overcomes the presumption that the motive which prompted the transfer was contemplation of death as above defined, I find that after the attack which Neal suffered in November, 1923, his physician felt that his condition was not. such as to indicate immediate death and, furthermore, that if the strain on the heart could be kept down there was no reason why he should not live for an indefinite period and that after his condition became serious in December, 1923, he was not apprised of the seriousness of his condition by the doctor, that his mental condition during November and December of 1923 was keen and alert, he was in a pleasant frame of mind, and his attitude was one of hope and expectancy that he would soon recover, and that he had for some time planned and was still planning, in January, 1924, to go to California. It is further shown that Neal was active up to the time of his death, except of course for the period of his confinement.

It also appears that it was Neal’s practice to make gifts to his children at Christmas time, which at times were more substantial than at others; that he loaned his children money to assist them in business and for purposes of investment; that Neal discussed at various times as far back as 1911 or 1912 the matter of giving his children property, stating that he thought it better to distribute his estate and not wait until his children might receive it in a lump sum, in order that they might learn to use it intelligently and in order *1069that they might have the benefit of his advise in so doing. Letters dated December 15, 1923, written by Neal to two of his children prior to the time his condition was considered serious, conveyed his desire to make them a substantial 1923 Christmas gift and his intention to have it effected as soon as possible.

While it is usually difficult to determine motivating factors operating in one’s mind, it is my opinion that the letters of December 15, 1923, addressed to his children prior to the time that even his physician considered his condition alarming, more clearly evidence the purpose of the gifts than inferences drawn from the other facts of record. Admittedly, the gift was not perfected until a short time later, during which there was a decided change in Neal’s condition, but the motive of the gift was clearly evidenced prior thereto. The decedent’s changed condition during the lapse of time incident to the formalities of the execution of the gifts does not affect his expressed intention to make these gifts as a Christmas present for 1923.

Considering the above facts, I am of the opinion that the statutory presumption that the gifts were in contemplation of death has been overcome. See William L. Nevin, Executor, 16 B. T. A. 15.

Green and SiefkiN agree with this dissent.