*771 Decedent during the years 1921 to 1937, inclusive, opened savings accounts in various banks and deposited funds therein as "trustee" for her husband and her seven children. There were one or more separate accounts for each of them. The decedent alone had the unrestricted right to make withdrawals from the accounts and did make such withdrawals from time to time. Held, that the funds in such accounts at the date of decedent's death are includable in her gross estate for estate tax purposes, since they were not transferred ferred to the beneficiaries as inter vivos gifts during the decedent's lifetime, and since if they were trust conveyances the trusts were intended to take effect at or after death, or were revocable at the pleasure of the grantor.
*1130 This proceeding involves a deficiency of $13,708.79 in estate tax of the estate of Eva Wasserman, deceased. In determining the deficiency the respondent has included in the gross estate 25 separate bank accounts aggregating $78,463.77 which decedent established during her lifetime, in each instance*772 naming herself as trustee for her husband or one of her seven children. Respondent determined that the decedent did not make a valid transfer of the funds in these accounts during her lifetime and that if she did such transfers were intended to take effect at or after death, or were made in contemplation of death. He further contends that the trusts, if such they were, were revocable and for that reason are includable in the gross estate.
Other minor issues relate to the deduction of administration expenses and taxes paid or to be paid by the executor, and to the inclusion in the gross estate of certain interest and other income accrued after the date of death of the decedent.
FINDINGS OF FACT.
The decedent died a resident of Brookline, Massachusetts, on February 21, 1937, at the age of 52. An estate tax return was filed by her executor with the collector of internal revenue for the district of Massachusetts on May 21, 1938, and by election of the executor the gross estate was valued as of the date one year from the date of death.
The decedent was survived by her husband, Jacob A. Wasserman, and their seven children, whose names and ages were as follows:
| Arthur A. Wasserman, son | 30 years |
| Esther Block, daughter | 28 years |
| Edith Rimmer, daughter | 25 years |
| Nathan A. Wasserman, son | 23 years |
| May M. Cotton, daughter | 21 years |
| Anna Gollance, daughter | 19 years |
| Jeannette L. Wasserman, daughter | 11 years |
*773 The decedent left an estate consisting principally of real estate, stocks and bonds, mortgage notes, and cash, valued in her estate tax return (on the optional date one year from her death) at $153,866.53, exclusive of the value of the 25 bank accounts referred to above. These properties represented the accumulations of decedent and her husband over a long period of years.
Prior to the adoption of the Eighteenth Amendment to the Constitution of the United States decedent and her husband conducted a liquor business in Boston. With the advent of prohibition, the decedent went into the real estate business, buying, remodeling, and renting houses in South Boston. She had an office in one of her buildings at the intersection of Broadway and Shawmut Avenue. *1131 Her husband conducted a tobacco business for a while but later sold that and engaged in the real estate business also.
With the repeal of prohibition decedent and her husband opened a liquor store, of which their son Nathan was put in charge, and also a restaurant and bar, which was put in charge of their son Arthur. Decedent became very active in the restaurant and worked there regularly during the rest of her*774 life.
The first of the 25 bank accounts referred to above was created in 1921, when decedent was 36 years of age. The last was created in 1937, the year of her death. Following is a list of the accounts, showing the date when each was opened, the amount of the original deposit, and the balance in the account at the date of decedent's death:
| HOME SAVINGS BANK | |||
| Date opened | Beneficiary | Original deposit | Balance in |
| account | |||
| Feb. 21, | |||
| 1937 | |||
| Feb. 7, 1921 | Nathan Wasserman | $500.00 | $4,000.00 |
| Feb. 7, 1921 | Anna Wasserman | 500.00 | 4,000.00 |
| Feb. 7, 1921 | May Mildred Wasserman | 500.00 | 4,000.00 |
| Nov. 24, 1925 | Jeannette L. Wasserman | 500.00 | 5,130.59 |
| Nov. 11, 1925 | Esther Wasserman | 3,000.00 | 4,000.00 |
| Nov. 11, 1925 | Edith Wasserman | 3,000.00 | 4,000.00 |
| Aug. 31, 1932 | Arthur Wasserman | 4,498.22 | 4,000.00 |
| SUFFOLK SAVINGS BANK | |||
| Apr. 8, 1932 | Jeannette Lillian Wasserman | $2,000.00 | $3,957.48 |
| UNITED STATES TRUST CO. | |||
| Sept. 4, 1934 | Jacob A. Wasserman | $500.00 | $1,279.44 |
| FRANKLIN SAVINGS BANK | |||
| Dec. 22, 1936 | Jeannette L. Wasserman | $3,300.00 | $3,300.00 |
| Dec. 22, 1936 | Anna Gollance | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | May Mildred Cotton | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | Nathan A. Wasserman | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | Edith Rimmer | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | Esther Block | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | Arthur A. Wasserman | 3,300.00 | 3,300.00 |
| Dec. 22, 1936 | Jacob A. Wasserman | 3,300.00 | 3,300.00 |
| THE BOSTON FIVE CENTS SAVINGS BANK | |||
| Jan. 7, 1937 | Jeannette L. Wasserman | $2,000.00 | $2,000.00 |
| Jan. 7, 1937 | Anna Gollance | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | Nathan A. Wasserman | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | May Mildred Cotton | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | Edith Rimmer | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | Esther Block | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | Arthur A. Wasserman | 2,000.00 | 2,000.00 |
| Jan. 7, 1937 | Jacob A. Wasserman | 2,000.00 | 2,000.00 |
*775 In opening the above accounts the decedent in each instance signed a "signature card" as "trustee" for either her husband or one of her children who was named as "beneficiary." The funds so deposited *1132 were from decedent's own property. In some or all of the 1921, 1925, 1932, and 1934 accounts substantial additional deposits were made from year to year in amounts of from less than $100 to $2,000. Also, there were withdrawals in varying amounts from time to time.
The funds used in opening the account for Arthur with the Home Savings Bank on August 31, 1932, were withdrawn from the accounts of Nathan, Anna, May Mildred, Esther, and Edith in amounts of approximately $900 from each account. For some time previous Arthur had been under family censure for having married against the wishes of the others and the account was established for him as a sort of family "peace offering" and with the purpose of putting him on an equal financial footing with the other children. The children themselves suggested the withdrawals for the purpose indicated.
In the 1936 and 1937 accounts there were no additional deposits except interest and no withdrawals up to the time of decedent's*776 death. All of these 1936 and 1937 accounts were opened with funds which decedent obtained from the sale of shares of stock of the General Electric Co. She sold through brokers 1,000 shares of such stock in December 1936 for approximately $52,000, with the intention of establishing the accounts. She was advised by an officer of the bank that she might make a saving in gift taxes by dividing the amounts up and postponing some of the gifts until 1937. Acting on this advice, she went to the Franklin Savings Bank on December 22, 1936, and opened the eight accounts of $3,300 each. She was accompanied by her son Nathan, who assisted in preparing the cards. Each of the eight bank books was given a number by which the decedent, who was unable to read or write, could identify it. The decedent retained these books and on Christman Day following, when the family was gathered at her house, handed them out to the respective "beneficiaries", saying that she was making each of them a gift of his or her account. The beneficiaries retained the books for a short time and then returned them to the decedent or to her son Nathan, who assisted her in most of her business affairs, to be placed in*777 the family safe deposit box at the bank for safekeeping. No one except the decedent or some one in her company had access to the safe deposit box.
On January 7, 1937, the eight accounts of $2,000 each were opened at the Boston Five Cents Savings Bank in substantially the same manner as those at the Franklin Savings Bank, and again the bank books were handed to the beneficiaries at a family gathering held at decedent's house a few days later, with the explanation that this was the balance of their Christmas gifts. Each of the bank books was then returned to Nathan to be placed in the safe deposit box with the others, where they all remained until after decedent's death.
*1133 In establishing the above accounts the decedent never executed any formal declaration of trust or entered into any trust agreement of any kind.
Withdrawals from the savings accounts, other than those referred to above to establish Arthur's account, were made as follows:
On October 15, 1934, $100 was withdrawn from each of the children's accounts, except that of Jeannette, to apply as part payment for a family burial ground. The total purchase price was $1,200 and the balance, $600, was paid*778 by the decedent with her own separate funds. The withdrawals were sanctioned by the children.
On October 14, 1936, withdrawals were made of $479.33 from each of the accounts of Nathan, Anna, May Mildred, Esther, and Edith in the Home Savings Bank, and of $236.15 from Arthur's account, leaving a balance in each of those accounts of exactly $4,000. On the same date, $500 was withdrawn from Jeannette's account, leaving a balance of $5,130.59. This money was all used to defray the cost of a large wedding for May Mildred. The beneficiaries all gave their consent to the withdrawals except Jeannette, who was then only 11 years old.
In October 1933 a withdrawal of $750.16 was made from Arthur's account to purchase new furniture for him and to pay for reconditioning work on the family residence at 21 Hopkins Street, Dorchester, to which Arthur was moving at that time. Decedent had just moved to a new residence in Brookline.
On April 15, 1936, $4,000 was withdrawn from Jeannette's account in the Suffolk Savings Bank. This money was used as a loan, or advancement, or otherwise to decedent's brother who was engaged in the clothing business. His business failed in that same year*779 and the money was lost.
Over the period November 1934 to February 1936 withdrawals aggregating $5,640, mostly in amounts of $1,000 each, were made from the account of Jacob A. Wasserman in the United States Trust Co. There is no explanation of what use was made of these withdrawals. There were also withdrawals of $1,000 from Anna's account in 1926, $700 from Jeannette's account in 1925, and a small amount from Jeannette's in 1934 which are not explained. There was a redeposit of a little more than $1,000 in Anna's account a short time after the withdrawal of the $1,000 in 1926.
All of the above withdrawals were made by the decedent. The decedent alone had access to the accounts and had absolute control over them. Withdrawals could be made only upon her demand and upon presentation of the account books.
After the decedent's death some of the accounts were continued and some were closed out. Interest of $1,696.26 was credited on the accounts *1134 after the decedent's death, of which amount $451.96 was accrued at the date of decedent's death.
The decedent left a will, executed in November 1933, which was duly probated in the County of Norfolk, Commonwealth of*780 Massachusetts. The first clause of the will provides:
FIRST: Any deposit of money in any Savings Bank, standing in my name as trustee for any of my children, I give to the child for whom said deposit is held in trust, free and discharged of all trusts.
The executor of decedent's estate, in computing the value of the gross estate (as of one year from the date of decedent's death), did not include the principal amounts of the 25 accounts described above or the interest credited to the accounts after the date of decedent's death. He did include in the gross estate $2,530.77 as income from real estate, stocks, bonds, and notes received between February 21, 1937, the date of decedent's death, and February 21, 1938. Of that amount $22.50 had accrued at the date of decedent's death. The respondent included the entire amount in his determination of the value of the gross estate.
On decedent's death certificate it is stated that:
The principal cause of death and related causes of importance in order of onset were as follows:
| Date of Onset | |
| Arteriosclerosis | 1931 |
| Chronic Cardiac Insufficiency | 1932 |
| Cerebral Hemorrhage | 1934 |
| Cerebral Hemorrhage 1/14-2/3 - 2/20 | 1937 |
*781 The decedent enjoyed good health most of her life. She was strong and stocky of build and possessed of great energy. She always practiced the habits of thrift and simplicity. For several years prior to her death she had had a cardiac insufficiency, or high blood pressure, but it was not serious and caused no great inconvenience. In 1933 she suffered a "fainting spell" while cooking dinner, and later in that year had an attack of facial paralysis which affected one side of her face for a short while. It had no permanent aftereffects, however. Her family physician diagnosed it as "Bell's Palsy."
The decedent was at work in the restaurant of her son Arthur on the day that she was fatally stricken. She had had a tooth extracted earlier in that day, but had returned to work. She died about five weeks later.
The executor of decedent's estate has incurred expenses of $1,674.08 in connection with estate tax matters, a portion of which has been paid, in addition to those claimed in the estate tax return and allowed by the respondent.
*1135 OPINION.
SMITH: The principal question for our determination in this proceeding is whether the amounts standing in the above*782 described bank accounts which decedent established for the benefit of her husband and children are includable in the value of her gross estate for estate tax purposes. The respondent has determined that they are, on the grounds, first, that there was no completed conveyance of the accounts by the decedent during her lifetime, and that if there was they were trust conveyances made in contemplation of death, or to take effect in use and enjoyment at or after death. Respondent further contends that the trusts, if such they were, were revocable and for that reason includable in the gross estate.
On the evidence of record we find little difficulty in agreeing with the respondent that there were no completed inter vivos gifts by the decedent of any of the funds in the accounts in question during her lifetime. It is essential to the validity of such gifts that the donor not only have a manifest intention to make the gift but that the subject matter of the gift, or something symbolic thereof, be delivered to the donee, or some one acting for the donee, so that it is put definitely and irrevocably beyond the ownership and control of the donor.
*783 It is clear that the decedent did not divest herself of either the ownership or control of any of the accounts. She merely deposited the funds in her own name as "trustee" for the children or her husband without releasing any of her control over them. There is no evidence of any agreement between the decedent and the banks where she made the deposits which would have authorized any one other than herself to withdraw any of the funds at any time. In Hogarth-Swann v. Steele (1936), 294 Mass. 396">294 Mass. 396; 2 N.E.(2d) 446, it was said that:
It is settled in this commonwealth that the mere fact that a person puts money belonging to him in a savings bank account in his name as trustee for another does not create a valid trust. Brabrook v. Boston Five Cents Savings Bank,104 Mass. 228">104 Mass. 228, 6 Am. Rep. 222">6 Am. Rep. 222; Robertson v. Parker,287 Mass. 351">287 Mass. 351, 355, 191 N.E. 645">191 N.E. 645, and cases cited. "Unless there is something more than the words that one is trustee for another, to show that a present creation of an equitable interest is intended and that the settlor has ceased to have full dominion, the nominal cestui has no rights." *784 Murray v. O'Hara (Mass.) 195 N.E. 909">195 N.E. 909, 911. The facts in the present case do not show such an intention or relinquishment of full dominion over the deposit.
However, in Scanzo v. Morano,284 Mass. 188">284 Mass. 188; 187 N.E. 552">187 N.E. 552, the court determined that where a wife deposited in a savings account the earnings of herself, her husband, and her son, as trustee for the son, and handed the bank book to the son, who returned it to her so that she could get the interest on the account, there was a valid trust *1136 created for the son. See McCaffrey v. North Adams Savings Bank,244 Mass. 396">244 Mass. 396; 138 N.E. 393">138 N.E. 393; Supple v. Norfolk Savings Bank for Seamen,198 Mass. 393">198 Mass. 393; 84 N.E. 432">84 N.E. 432; Mulloy v. Charlestown Five Cents Savings Bank,285 Mass. 101">285 Mass. 101; 188 N.E. 608">188 N.E. 608; Robertson v. Parker,287 Mass. 351">287 Mass. 351; 191 N.E. 645">191 N.E. 645; and Buteau v. Lavalle,284 Mass. 276">284 Mass. 276; *785 187 N.E. 628">187 N.E. 628.
A full discussion of this question is found in Eschen v. Steers (C.C.A., 8th Cir.), 10 Fed.(2d) 739, where it was held that there was no gift or trust where the intended donor wrote a letter to the bank directing the transfer of funds to another's account.
The most recent case from the Massachusetts courts to come to our attention is Greeley v. Flynn,310 Mass. 23">310 Mass. 23; 36 N.E.(2d) 394 (Sept. 10, 1941). The facts in that case bear a close resemblance in many important respects to those in the instant case. The donor deposited funds in a savings account in her own name as "trustee" for her nephew, telling the nephew that she had given him the account and giving him possession of the account book, and from time to time, at his request, withdrawing funds from the account for him. It was held that there was no completed inter vivos gift, but that a valid trust was created for the nephew. In its opinion the court said:
In the case at bar the only findings of the master bearing on the question of delivery of the book with the intention of making a gift thereof are that in November, 1933, Miss Conway*786 gave the book to the defendant's mother who in turn gave it to him; that Miss Conway intended to retain control of the account and that "she alone controlled the account and she alone could make withdrawals"; that subsequent withdrawals were made by her and the sums withdrawn given by her to the defendant; and that she intended that the account should become payable to the defendant upon her death. It seems obvious that these findings of the master would not warrant a finding by the judge that there was any delivery of the book by Miss Conway to the defendant or to anyone for him, with an intent on her part to pass title and thus transfer ownership to him.
While in the circumstances here present there may be some question as to whether the accounts which petitioner set up in the various banks were valid trusts for the benefit of the husband and children, there is little doubt that under the authoritative cases they were not completed inter vivos gifts. Greeley v. Flynn, supra. The funds so deposited were decedent's own funds. In depositing them as "trustee" she dispossessed herself of no interest whatever in the funds. Although the bank books were left*787 in possession of the alleged donees for a short time, these bank books themselves carried no rights of possession or enjoyment of the funds. They could be reached only by the decedent in person. There is no indication that the banks would have complied with the request of any of the beneficiaries for the payment to them of either the interest or principal of any of the accounts. In fact the evidence is that they would *1137 not have and that all withdrawals had to be made by the decedent in person.
Substantial withdrawals were made by the decedent from all of the accounts from time to time. While the testimony of petitioner's witnesses was that the withdrawals, or most of them, were made with the consent of the beneficiaries themselves, their consent was not necessary. At least one withdrawal was made without the beneficiary's consent when $4,000 was withdrawn from Jeannette's account when she was only 11 years old and loaned or given to the decedent's brother for use in his business. The business went into bankruptcy in the same year and the funds were lost.
But even if the accounts were validly created trusts, we think that they were transfers intended to take*788 effect in possession and enjoyment at or after death within the meaning of section 302(c) of the 1926 Act, as amended. This conclusion seems inescapable in view of the established facts that the decedent intended to and did retain complete and unlimited control over the funds, not just as a fiduciary but to the detriment of at least one beneficiary. The evidence shows beyond much doubt that it was not the decedent's intention that any beneficial interest in the funds should vest irrevocably in the beneficiaries until after her death. It is significant that in the first paragraph of her will decedent bequeathed to each of the beneficiaries the balance then standing in their respective accounts. This clause was put in the will at the suggestion of decedent's attorney. The provision would have been unnecessary, however, if the accounts had been previously conveyed to the beneficiaries either as inter vivos gifts or trusts.
We think, too, that the trusts, if such they were, were revocable trusts, as the respondent further contends. See *789 Greeley v. Flynn, supra. The decedent had the unrestricted right to withdraw the funds and thus destroy the trusts.
There is some evidence to support the respondent's further determination that the transfers which the decedent made to the accounts in 1936 and 1937 were made in contemplation of death, but we do not need to pass upon this question.
As to the remaining issues, the respondent concedes that petitioner is entitled to a deduction of $1,674.08 in addition to that already allowed on account of administration expenses, including the fee of the attorney representing petitioner in this proceeding.
It is alleged in the amended petition that the respondent further erred "in failing to allow credit for estate taxes due the Commonwealth of Massachusetts." Counsel for the petitioner stated at the hearing:
* * * The estate will be liable for Massachusetts taxes which have not been paid and the Petitioner claims an allowance should be made for those, that, of course is a saving of his right to the credit. *1138 Credit for the Massachusetts estate tax actually paid will be allowed as provided in section 813, Internal Revenue Code.
It is further*790 alleged in the amended petition that the respondent erred in including in the gross estate the amount of $4,206.91 representing income of the estate for the period from the date of decedent's death to the optional valuation date one year later. It is stipulated that of the amount of $4,206.91, $1,696.26 represented interest credited to the above 25 accounts after the date of decedent's death. A portion of that amount, $451.96, had accrued on February 21, 1937, the date of decedent's death. A further portion of the $4,206.91, $2,530.77, represented income from real estate, stocks, bonds, and notes received between February 21, 1937, and February 21, 1938. The executor included this latter amount in the value of the gross estate in the estate tax return.
Respondent concedes in his brief that his determination of the deficiency herein with respect to "interim income" is not in accordance with Maass v. Higgins,312 U.S. 443">312 U.S. 443, or article 11 of Regulations 80 as amended by Treasury Decision 5047. Respondent further states in his brief that the stipulation of facts will provide the basis for a final adjustment of this issue under Rule 50.
*791 Decision will be entered under Rule 50.