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Michigan Law Review

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Full-Text Articles in Estates and Trusts

Future Interests - Powers-Fraud On A Special Power, Bernard L. Trott S. Ed. Apr 1949

Future Interests - Powers-Fraud On A Special Power, Bernard L. Trott S. Ed.

Michigan Law Review

H was co-trustee under a trust agreement executed by his father which provided for payment of a specified monthly sum to H for life and after his death to his wife W. The trust was to terminate upon the death of the survivor of H and W, and thereupon the other trustee was to deliver 20% of the corpus to each of three named persons, A, B, and C. The trust instrument further provided that H was to have absolute power, with approval of the co-trustee, to prescribe that the distribution of this 60% of the …

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Wills-Publication Of Will And Acknowledgment Of Signature, Robert W. Shadd Apr 1949

Wills-Publication Of Will And Acknowledgment Of Signature, Robert W. Shadd

Michigan Law Review

Testatrix telephoned two friends, asking them to come to her home and witness her will. When they arrived, the document was lying on a table in testatrix' presence, and she declared, "Here is the pen, sign it." Both witnesses were positive testatrix did not sign in their presence. The evidence, while not conclusive, also tended to show that neither witness saw the signature, testatrix having signed on page seven while the document was opened to the attestation clause on page eight. The superior court admitted the will to probate over appellant's objection that testatrix had failed to meet the statutory …

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Wills-Right Of Legatee To Renounce To Detriment Of Creditors, William R. Worth Apr 1949

Wills-Right Of Legatee To Renounce To Detriment Of Creditors, William R. Worth

Michigan Law Review

A judgment creditor of an insolvent residuary legatee commenced supplementary proceedings to reach the legacy. While these proceedings were pending, some ten months after the will was probated, and after testifying that he had a one-third interest in the residuary estate, the legatee filed a formal renunciation of his interest. In the proceeding by the executors for a final accounting, the Surrogate's Court and the Appellate Division ruled that the renunciation was effective to divest the judgment debtor of his interest under the will. On appeal, held, reversed, two judges dissenting. In re Wilson's Estate, 298 N.Y. 398, …

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Illegal Conditions And Limitations: Effect Of Illegality, Olin L. Browder, Jr Apr 1949

Illegal Conditions And Limitations: Effect Of Illegality, Olin L. Browder, Jr

Michigan Law Review

IN earlier articles the writer undertook to explore that miscellaneous and somewhat neglected field of law in which public policy is held to nullify the efforts of persons to impose certain types of conditions and limitations on dispositions of their property.' Such provisions most commonly take the form either of conditions subsequent or executory limitations, but occasionally appear as conditions precedent or special limitations. Unlike provisions which run afoul of the rule against perpetuities or the rules against restraints on alienation, the provisions in question usually prescribe conduct on the part of beneficiaries which is not directly related to the …

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Trusts-Tentative Trusts-Effect Of Delivery Of Passbook, Alan P. Goldstein Mar 1949

Trusts-Tentative Trusts-Effect Of Delivery Of Passbook, Alan P. Goldstein

Michigan Law Review

Anna Farrell, a confined incompetent at the time of this suit, had a savings bank deposit in her own name, "in trust for my daughter Lucy Farrell." Just prior to Anna's admission to the hospital, while still of sound mind, she handed a sealed envelope to Lucy and told Lucy to hold it for her. The envelope contained, among other papers, the pass book to the bank deposit. Thereafter, Lucy claimed the money in the account on the ground that she had, over the years, delivered the money in the account to her mother for safekeeping. Anna's guardian petitioned for …

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Wills-Validity Of Devise To United States Government, Richard J. Brake Mar 1949

Wills-Validity Of Devise To United States Government, Richard J. Brake

Michigan Law Review

A California testator bequeathed "all I own and possess to the United States Government." His heirs sought to have the disposition set aside, claiming the federal government could not be a beneficiary under the California probate statute which permitted testamentary dispositions to be made to the state, counties, municipal corporations and certain others. From the order denying their petition for distribution, the heirs appealed. Held, reversed. The word "state" as used in the probate statute does not include the United States. In re Burnison's Estate, (Cal. App. 1948) 196 P. (2d) 822.

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The Church And Spiegel Cases: A Reinterpretation Of The "Possession Or Enjoyment" Clause Of I.R.C. 811 ©, William J. Schrenk Jr., Richard V. Wellman Mar 1949

The Church And Spiegel Cases: A Reinterpretation Of The "Possession Or Enjoyment" Clause Of I.R.C. 811 ©, William J. Schrenk Jr., Richard V. Wellman

Michigan Law Review

Although federal tax statutes have provided for over thirty years that "transfers intended to take effect in possession or enjoyment at or after death" shall be included in the grantor's gross estate for estate tax purposes attempts to define precisely the scope of this language have not been outstanding for their success. In two recent decisions by the Supreme Court, Commissioner v. Church and Spiegel v. Commissioner, a further attempt at clarification has been made.

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Wills-Validity Of Condition Against Contest-Contest By Minor, Roland E. Ginsberg Mar 1949

Wills-Validity Of Condition Against Contest-Contest By Minor, Roland E. Ginsberg

Michigan Law Review

Defendant, a minor, contested his mother's will which provided that if a beneficiary should make any effort to invalidate or alter the will, the provisions made for such person should be void. Defendant's father, who had been appointed guardian ad litem, filed notice of contest and petitioned the probate court that the general guardian be compelled to contest the will. After hearing, it was so ordered, and a will contest was held in the circuit court, in which mental incompetency and undue influence were alleged. The contest being unsuccessful, the will was admitted to probate. Plaintiff, as executrix and …

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Future Interests-Construction Of "Surviving" In Substitutionary Gift Of Remainder, J. R. Mackenzie S.Ed. Feb 1949

Future Interests-Construction Of "Surviving" In Substitutionary Gift Of Remainder, J. R. Mackenzie S.Ed.

Michigan Law Review

Testator's will provided that his property should go to his wife W for life, then in equal shares to his sister A and his brothers B and C. The language used was appropriate to create vested remainders in A, B and C. The will then provided, "And in case of the death of my said sister or either of my said brothers before the death of my said wife, the share that he or she would have taken shall be divided equally between his or her surviving children, by right of representation." A and B died before testator; …

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Wills-Constructive Trust Imposed On All Heirs Where Some Interfered With Execution Of Will, Herhert E. Phillipson, Jr. Feb 1949

Wills-Constructive Trust Imposed On All Heirs Where Some Interfered With Execution Of Will, Herhert E. Phillipson, Jr.

Michigan Law Review

Two heirs at law, by physical force or by creating a disturbance, prevented decedent from executing a will devising her property to plaintiff. Shortly thereafter, decedent lapsed into a semi-comatose condition from which she never recovered. Plaintiff asked the court to impose a constructive trust on the distributive shares of all heirs, six of whom were not parties to the fraud. The district court gave judgment for the plaintiff; the Court of Civil Appeals partially reversed, allowing the innocent heirs to take free of any trust. On appeal, held, judgment of district court affirmed. Since all heirs at law …

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Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer Jan 1949

Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer

Michigan Law Review

Defendants, administrators of the estate of the deceased partner, agreed with the surviving partner to continue the partnership hotel business, with the approval of the probate court. After some operation, the surviving partner sued to compel the administrators to sell him the interest of the deceased at a value to be judicially determined. Defendants cross-complained, asking the court to liquidate the business and award them the amount of the interest of the deceased in the proceeds. Held, reversing the decree below, the assets of the dissolved partnership should be liquidated, in accord with defendants' prayer. Zach v. Schulman, …

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Taxation-Federal Estate Tax-Inclusion In Gross Estate Of Transfer By Which Settlor Retained Power To Terminate, C. C. Grunewald S.Ed. Jan 1949

Taxation-Federal Estate Tax-Inclusion In Gross Estate Of Transfer By Which Settlor Retained Power To Terminate, C. C. Grunewald S.Ed.

Michigan Law Review

In 1928, decedent established a trust giving his wife the income for her life, with a remainder to his three children. Decedent, as co-trustee, retained power to pay portions of the corpus to his wife and to change the trust on his approval of a written request by his wife. When the estate challenged the commissioner's assessment of a tax deficiency, the Tax Court, relying on the power to invade the principal, included the trust corpus in the gross estate under section 811(d)(2) of the I.R.C., no reduction being allowed for the wife's life estate since no method of evaluating …

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Future Interests - Powers Of Appointment- Effect Of Bankruptcy Of Donee Of General Testamentary Power, Albert B. Perlin, Jr. Jan 1949

Future Interests - Powers Of Appointment- Effect Of Bankruptcy Of Donee Of General Testamentary Power, Albert B. Perlin, Jr.

Michigan Law Review

By her will, X established a spendthrift trust, appointing Y and a trust company as co-trustees. In addition to receiving the income from the trust during his life, Y was given a general testamentary power to appoint the corpus; in default of appointment the corpus was to be divided equally among Y's issue. After X's death Y filed a voluntary petition in bankruptcy, listing the above interest as that of a beneficiary of a spendthrift trust, "value none." Before Y's death the trustee in bankruptcy purported to sell to plaintiff, who was not a creditor of Y …

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Wills-Validity Of Attestation On Separate Sheet Of Paper Not Physically Attached To Will, Myron J. Nadler Jan 1949

Wills-Validity Of Attestation On Separate Sheet Of Paper Not Physically Attached To Will, Myron J. Nadler

Michigan Law Review

Testatrix drew an instrument consisting of a single sheet of paper, intending it as her will. In the presence of a notary public, three witnesses observed the instrument with testatrix' signature thereon and her acknowledgment of it as her will, but did not sign it. The document was then placed in an envelope. A separate instrument of attestation which referred to the will was prepared by the notary and signed by the testatrix and the attesting witnesses. This instrument and the envelope containing the will were both placed in another folder which was then deposited with the proper officials. Probate …

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Fiduciary Administration -- Deviation From Terms Of Trust--Invasion Of Principal For Benefit Of Life Tenant, W. Stirling Maxwell S.Ed. Jan 1949

Fiduciary Administration -- Deviation From Terms Of Trust--Invasion Of Principal For Benefit Of Life Tenant, W. Stirling Maxwell S.Ed.

Michigan Law Review

By a will executed in 1932 testator, who died in 1944, made outright bequests of $2,500 and his personal goods to his widow and $5,000 to each of his sons. He then devised the residue of his estate to trustees to pay the income to his widow for life and, upon her death, to distribute the corpus to his then living issue in equal shares by right of representation, and, in default of such issue, to those who would take if he had died intestate when his widow died. The will gave the trustees broad investment and management powers but …

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The Revenue Act Of 1948-: Federal Estate And Gift Taxation, Milton D. Solomon Dec 1948

The Revenue Act Of 1948-: Federal Estate And Gift Taxation, Milton D. Solomon

Michigan Law Review

The community property system has always been a thorn in the side of the federal tax structure. The theory that husband and wife have equal, vested, undivided one-half interests in property held by them as tenants in community, when given effect for federal tax purposes, has resulted, because of our system of graduated rates, in substantial income, estate and gift tax advantages in favor of residents of community property states over their neighbors in non-community property states. Attempts to change this situation as to federal income taxation proved uniformly unsuccessful. However, success was achieved in the field of federal estate …

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Taxation-Liens-Nature Of Federal Estate Tax Lien, David D. Ring Dec 1948

Taxation-Liens-Nature Of Federal Estate Tax Lien, David D. Ring

Michigan Law Review

At the time of his death, decedent owned certain land in fee simple. His executrix, authorized by an order of the probate court, sold the land to herself as an individual. Subsequently, the United States began condemnation proceedings against the land, paying an award into court. Before distribution of this award was ordered, the executrix in her individual capacity and as ostensible owner was permitted in accordance with statute to withdraw a part of this award. The withdrawal was made without prejudice to her right to the remainder if it proved more than sufficient to satisfy the claims of other …

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Wills--Merger Of Annuity For Life In Residue Which Passed By Intestacy, L. K. Cooperrider S.Ed. Dec 1948

Wills--Merger Of Annuity For Life In Residue Which Passed By Intestacy, L. K. Cooperrider S.Ed.

Michigan Law Review

Testator made several pecuniary bequests, including an annuity to his daughter of $25 per month for life. The residue was bequeathed to charity, but this gift failed, and it went instead, by intestacy, to the daughter and a granddaughter. The latter, objecting to a plan of distribution proposed by the auditor, petitioned for immediate payment to herself of one-half of the entire estate, contending that the daughter's annuity merged in her intestate share. The Orphans' Court dismissed the petition, and decreed that $12,831.44 of the estate of $32,831.44 be retained to carry out the testator's delayed bequests, including the annuity, …

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Powers-General Testamentary Power:-Ineffective Appointment- Devolution Of Appointive Property, Richard L. Eckhart S.Ed. Nov 1948

Powers-General Testamentary Power:-Ineffective Appointment- Devolution Of Appointive Property, Richard L. Eckhart S.Ed.

Michigan Law Review

In the usual case, the question of the devolution of property subject to a general testamentary power where the appointment is ineffective arises in a contest between those representing the estate of the donee on the one hand and those representing the estate of the donor, including the takers in default, on the other. The historical concept that the devolution of appointive property is from the donor to the appointee competes with the modern concept that the donee's interest in the property is, for many purposes, close to absolute ownership.

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Taxation-Trust Income-Taxability To Person Other Than Settlor On Basis Of "Unfettered Command", L. K. Cooperrider S.Ed. Nov 1948

Taxation-Trust Income-Taxability To Person Other Than Settlor On Basis Of "Unfettered Command", L. K. Cooperrider S.Ed.

Michigan Law Review

Petitioner's father, who owned the entire capital stock of a manufacturing corporation, bequeathed a controlling interest therein to his wife and son, in equal shares. The widow transferred her shares in trust to a corporate trustee, the evident purpose being to vest in the son, petitioner here, the power to control the corporation. According to the terms of the trust the income was to be accumulated and added to the corpus for the joint lives of the settlor and petitioner, and after death of settlor to be disposed of according to the directions of petitioner. The shares were to be …

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Wills-Bequests Of Annuities-Right Of Legatee To Receive Principal In Lieu Of Annuity, Daniel W. Reddin Iii S.Ed. Nov 1948

Wills-Bequests Of Annuities-Right Of Legatee To Receive Principal In Lieu Of Annuity, Daniel W. Reddin Iii S.Ed.

Michigan Law Review

Decedent left a will in which she made a bequest of $3000, $1000 to be paid in cash and the balance to be invested by her executor in annuities to be purchased from certain specified companies. In his final report, which was upheld by the district court, the executor expressed his belief that the legatee had the right under this will to elect either to receive the entire bequest in cash or to have the designated part invested in the specified annuities, and stated that since the legatee had elected to receive the cash, the entire $3000 would be distributed …

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Quasi-Contracts-Taxation-Rescission Of Gifts Where Gift Fails To Achieve Donor's Purpose Of Minimizing Federal Income Taxes, Charles M. Soller S.Ed., Edwin F. Uhl S. Ed. Jun 1948

Quasi-Contracts-Taxation-Rescission Of Gifts Where Gift Fails To Achieve Donor's Purpose Of Minimizing Federal Income Taxes, Charles M. Soller S.Ed., Edwin F. Uhl S. Ed.

Michigan Law Review

A recent Michigan case, Stone v. Stone, presents problems of complexity and far-reaching importance. The plaintiffs, husband and wife, each owned a one-half interest in a family business partnership, and each apparently reported a proportionate share of the partnership earnings for federal income tax purposes. For the purpose of further reducing taxes on the income of the family unit, each parent transferred a one-quarter interest in the partnership to one of their two minor children, and thereafter each parent and child filed separate income tax returns reporting one-fourth of the partnership earnings as individual income. Each parent, under a …

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Taxation-Debt Reduction, John M. Veale S.Ed. Jun 1948

Taxation-Debt Reduction, John M. Veale S.Ed.

Michigan Law Review

Inherent in an economy financed by a large volume of credit, extending over varying intervals of time, is the problem of debt reduction and revalorization. The ramifications of this problem in the income tax field have long intrigued legal scholars and confounded the courts. A recent case illustrates anew the danger, to client and counsel, lurking in the assumption that the tax significances of debt reduction have finally been reduced to mathematical certainty. The taxpayer borrowed $90,000 from a bank in 1925, using the funds to pay off encumbrances upon, and make improvements on, a piece of property. As a …

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Insurance-Gift-Right Of Named Beneficiary Of Life Policy To Proceeds As Against A Donee By Delivery, Bruce L. Moore S.Ed. Jun 1948

Insurance-Gift-Right Of Named Beneficiary Of Life Policy To Proceeds As Against A Donee By Delivery, Bruce L. Moore S.Ed.

Michigan Law Review

Insured, in accordance with the terms of a life insurance policy, named the woman with whom he was then living as beneficiary. Subsequently, he returned to his wife and handed the policy to her with appropriate words indicating an intention to make a present and absolute delivery of it to her as a gift. No notice of a change of beneficiary was given to the insurance company. The policy reserved the right to insured to change the beneficiary by filing a written request with the company, such change to take effect only when indorsed on the policy by the company. …

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Future Interests-Deeds-Construction Of Language To Create A Trust And A Condition Subsequent, Ira M. Price, Ii S.Ed. Jun 1948

Future Interests-Deeds-Construction Of Language To Create A Trust And A Condition Subsequent, Ira M. Price, Ii S.Ed.

Michigan Law Review

A deed conveyed land to a named schoolmaster of Bristol and his successors forever "for their support for instruction of the children of the town, . . . Provided always . . . that if the said town shall neglect to place a good and sufficient Grammar schoolmaster in the said town at the death or removal of any schoolmaster . . .for the space of twelve months after the said death or removal, that the land shall" revert to me . . . and my heirs as fully and as effectively as if this deed had not been made …

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Wills-Dependent Relative Revocation When Revocatory Codicil Contains Ineffective Substituted Bequest, F. William Hutchinson S.Ed. Jun 1948

Wills-Dependent Relative Revocation When Revocatory Codicil Contains Ineffective Substituted Bequest, F. William Hutchinson S.Ed.

Michigan Law Review

Testator's will, executed in 1926, provided a trust fund for his adopted daughter, then a minor, and named his wife as residuary legatee. By the terms of the will the daughter was to receive the trust income after she became twenty-one and the principal when she reached the age of thirty-five. In 1942, when the daughter was thirty-one, married, and the mother of two children, the testator added a codicil which included the following provision: "I hereby revoke the Trust Fund in favor of my Daughter Mildred, and substitute a lump sum of ___ dollars in cash." The testator died …

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Descent And Distribution-Uniform Simultaneous Death Act--Applicability Of Lapse Statute, Edward S. Tripp S.Ed. Jun 1948

Descent And Distribution-Uniform Simultaneous Death Act--Applicability Of Lapse Statute, Edward S. Tripp S.Ed.

Michigan Law Review

H and W were found dead or near death. The will of each left all property to the other. Nephews and nieces survived W while no relatives survived H. W's relatives claimed both estates against a claim of escheat. The lower court found that H survived W and that W's kin were entitled to take under the Maryland lapse statute. On appeal, held, affirmed. Regardless of which party survived, application of the Uniform Simultaneous Death Act and the lapse statute entitled W's relatives to take against the claim of escheat. Mayor and City Council of …

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Executors And Administrators-Powers Of Executor Prior To The Grant Of Letters Testamentary, R. V. Wellman Jun 1948

Executors And Administrators-Powers Of Executor Prior To The Grant Of Letters Testamentary, R. V. Wellman

Michigan Law Review

Testator's will was probated solely for the purpose of passing title to the real estate involved. There was no request for letters testamentary by those named executors in the will, it being alleged that there was no personal estate necessitating administration. Six days prior to the expiration of the statutory period for commencing such an action, plaintiffs, creditors, started a suit against the persons named as executors for the purpose of extending the lien of their debt against the land in the estate. The defendants appeared specially to question the propriety of the action against them. On appeal from the …

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Taxation - Federal Income Tax - Choice Of Remedies-Tax Court Or District Court, Samuel N. Greenspoon S.Ed. Jun 1948

Taxation - Federal Income Tax - Choice Of Remedies-Tax Court Or District Court, Samuel N. Greenspoon S.Ed.

Michigan Law Review

Plaintiff, in 1935, purported to set up a trust of $300,000 for the benefit of her infant daughter; and thereafter in 1936 paid the gift tax thereon. She then borrowed from the trustee; (herself and husband) $298,000 of the trust corpus. In 1938 she paid $35,760 interest to the trustees and attempted to deduct it as an expense. This deduction was disallowed and the plaintiff then filed in the Tax Court a petition for redetermination on the ground that the gift tax of 1936 had been erroneously paid and should now be allowed as a credit against the assessed deficiency …

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Future Interests - Statute Abolishing The Rule In Shelley's Case Applied To The Worthier Title Doctrine, Joseph W. Morris May 1948

Future Interests - Statute Abolishing The Rule In Shelley's Case Applied To The Worthier Title Doctrine, Joseph W. Morris

Michigan Law Review

Plaintiff set up an irrevocable trust of $75,000 to pay the income to himself for life, and upon his death to distribute the remainder of the trust to his heirs at law according to the laws of succession of the State of California in existence at his death. He later brought suit to terminate the trust on the theory that the worthier title doctrine prevented the creation of a remainder in his heirs at law, and that as sole beneficiary of the trust, he was entitled to termination. Held, the worthier title doctrine was inapplicable because of a statute …

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