Cory v. Garin

NEWSOM, J.

I respectfully dissent.

The purpose of taxing certain inter vivos transfers under inheritance tax laws is to eliminate tax avoidance (Estate of Thurston (1950) 36 Cal.2d 207, 210 [223 P.2d 12]). Where the nature of the transfer is testamentary, and the transfer is a substitute for disposition by will or passage by intestacy, an inheritance tax will be levied. (Estate of Bielec (1972) 8 Cal.3d 213, 222 [104 Cal.Rptr. 516, 502 P.2d 12, 58 A.L.R.3d 1088].)

Having these precepts in mind, I cannot agree that the “advancement” here was made in lieu of testamentary disposition, or was testamentary in character, since in fact it was made purely for commercial reasons, to promote and preserve the family business.

The higher tax is being imposed merely because, in her desire to equalize her children’s distributive shares in her estate, Mrs. Garin used the word “advancement.” Had she eschewed such reference, and merely made allowance for the advancement by reducing Henry’s share by specific bequest, no inheritance tax could be imposed on the advancement.

The higher tax, then, becomes a penalty for describing an act which, if it had been merely done and not labeled, could not have triggered such tax.

*1016This is an exaltation of form over substance. I would read the subject sections as requiring that we analyze the purpose of the transfer—whatever its designation in the will—as of the time it took place in determining whether it was testamentary in nature.

I would affirm.

A petition for a rehearing was denied December 28, 1979. Newsom, J., was of the opinion that the petition should be granted. Respondents’ petition for a hearing by the Supreme Court was denied January 24, 1980.