Taxation-Federal Estate and Gift Commons^™

Symposium: The Role Of Federal Law In Private Wealth Transfer, Jeffrey Schoenblum

Vanderbilt Law Review

Property and inheritance are "quintessential state matters."' In fact, there is no federal intestacy law. There is no federal wills law. There is no federal trust law. And yet.... Increasingly, federal law impacts court decisions involving private wealth transfer. Increasingly, federal law is the central consideration in premortem and postmortem planning for private wealth transfer. Despite this, until recently, little scholarly attention has been paid to this phenomenon; the assumption regarding the centrality of state law, quoted above, having gone largely unquestioned. But now that the "sleeping giant" has awakened, the role that federal law plays in private wealth transfer …

Federalization Of The Law Of Charity, Mark L. Ascher

Vanderbilt Law Review

To this day, the law of charity is often thought of as a matter for the states. In fact, the crucial law relating to charity is now almost always federal. For certain purposes, state law still determines whether a given entity is "charitable." It also determines the propriety of a charitable fiduciary's conduct when someone who has standing sues. But federal law determines whether an entity qualifies for various tax incentives, such as exemption from the federal income tax and eligibility to receive tax-deductible gifts, and qualification for these incentives generally determines whether the entity comes into existence and, if …

Disclaimers And Federalism, Adam J. Hirsch

Vanderbilt Law Review

The beneficiary of an inheritance has the right to disclaim (i.e., decline) it, within limits ordinarily set by state law. This Article examines situations where a beneficiary's right to disclaim might instead be governed by federal law, as a matter of both existing doctrine and public policy. Issues of federalism arise with regard to disclaimers in several contexts: (1) when a disclaimer would function to defeat a federal tax lien; (2) when a disclaimer could affect a beneficiary's eligibility for Medicaid assistance; (3) when a beneficiary disclaims ERISA pension benefits; and (4) when a beneficiary executes a disclaimer prior to …

Is Federalization Of Charity Law All Bad? What States Can Learn From The Internal Revenue Code, Melanie B. Leslie

Vanderbilt Law Review

Professor Ascher makes a compelling case that federal law, and especially the Internal Revenue Code (the "Code"), has eclipsed state law as the predominate regulating force of the charitable sector. Professor Ascher views this trend with trepidation-he criticizes the Code for imposing a "frightening and bewildering array of often draconian penalties" and for its failure to track preexisting state-law concepts.

I agree that the combination of state and federal law creates an impenetrable maze that charitable fiduciaries find overly difficult to negotiate. Yet I am reluctant to finger the Code as the primary culprit. In my view, state law deserves …

The Stored Communications Act And Digital Assets, David Horton

Vanderbilt Law Review

This Article explores the impact of federal law on a state fiduciary's management of digital assets. It focuses on the lessons from the Stored Communications Act ("SCA'), initially enacted in 1986 as one part of the Electronic Communications Privacy Act. Although Congress designed the SCA to respond to concerns that Internet privacy posed new dilemmas with respect to application of the Fourth Amendment's privacy protections, the drafters did not explicitly consider how the SCA might affect property management and distribution. The resulting uncertainty affects anyone with an email account. While existing trusts and estates laws could legitimately be interpreted to …

The Creeping Federalization Of Wealth-Transfer Law, Lawrence W. Waggoner

Vanderbilt Law Review

This Article surveys areas of federalization of wealth-transfer law. Federal authorities have little experience in making law that governs wealth transfers, because that function is traditionally within the province of state law. Although state wealth-transfer law has undergone significant modernization over the last few decades, all three branches of the federal government-legislative, judicial, and executive have increasingly gone their own way. Lack of experience and, in many cases, lack of knowledge on the part of federal authorities have not dissuaded them from undermining well- considered state law. The Article covers these topics: federal preemption of several areas of state law, …

Strange Bedfellows: The Federal Constitution, Out-Of-State Nongrantor Accumulation Trusts, And The Complete Avoidance Of State Income Taxation, Jeffrey Schoenblum

Vanderbilt Law Review

With the maximum rate of federal income tax at 39.6 percent, the Medicare surtax on investment income of 3.8 percent, and some state income tax rates exceeding 9 percent, taxpayers in the highest brackets have been seeking to develop strategies to lessen the tax burden. One strategy that has been receiving increased attention is the use of a highly specialized trust known as the NING, a Nevada incomplete gift nongrantor trust, which eliminates state income taxation of investment income altogether without generating additional federal income or transfer taxes. A major obstacle standing in the way of accomplishing this objective, however, …

Donor Standing To Enforce Charitable Gifts: Civil Society Vs. Donor Empowerment, Iris J. Goodwin

Vanderbilt Law Review

The cat is out of the bag: Donors are fast discovering what was once a well-kept secret in the philanthropic sector-that a gift to public charity donated for a specific purpose and restricted to that purpose is often used by the charity for its general operations or applied to other uses not intended by the donor. In most states, the Attorney General is the agent for enforcement of such gifts (an arrangement that recognizes the public's role as the ultimate beneficiary of any public charity). But Attorney General offices are beset with difficulties that make it virtually impossible to monitor …

Federal Estate And Gift Taxation Of Joint Interests: Planning And Policy Perspectives, Hugh D. Brown

Vanderbilt Law Review

This Note will first provide a brief background outlining the incidents of joint tenancy which make it an attractive form of co-ownership under state law. This background section also will place joint ownership in the overall perspective of federal estate and gift taxation by pointing out the impossibility of achieving certain basic federal estate planning objectives in an estate composed primarily of jointly held assets. The Note will then analyze the specific provisions of the Internal Revenue Code governing federal estate and gift taxation of joint interests. This analysis will: first, focus on some of the legal problems generated by …

Estate Tax Deductibility Of Underwriters' Expenses After An Executor's Sale Of Stock: A Loophole In Section 2053, Mark D. Maloney

Vanderbilt Law Review

This Recent Development will examine the relationship between two Code provisions that are essential to the calculation of the taxable estate. Section 2031 establishes the value of the "gross estate," and section 2053 provides that certain administrative expenses are deductible from the gross estate. Recently, in Estate of Joslyn v. Commissioner and Estate of Jenner v. Commissioner,' two United States Courts of Appeals applied sections 2031 and 2053 in a manner that substantially benefits estates that possess large holdings of a particular stock. Because large blocks of stock are difficult to liquidate, the per-share price of the stock will actually …

The Changing Meaning Of "Gift": An Analysis Of The Tax Court's Decision In Carson V. Commissioner, Jeffrey Schoenblum

Vanderbilt Law Review

This Article will focus on the Carson case in an effort to identify the emerging meaning, if any, of gift. Following a consideration of the factual background of the case in Part II, Part HI will analyze critically and in-depth each of the five Carson opinions in an effort to decipher the various currents at play and any common ground that may still be shared by a majority of the court. Finally, Part IV will consider the decision's likely consequences and the long-term prospects for a settled meaning for gift, one that is not only workable, as is the case …

Recent Cases, Linda A. Bunsey, David M. Thompson, Charles K. Campbell, Jr., Keith B. Simmons, Thomas C. Hundley

Vanderbilt Law Review

If the instant case, rather than Northway, is to become the accepted rule in the area of discounting, consumers and state lenders will be protected while the national bank-lenders will be burdened only slightly, if at all. National banks located in states that permit state lenders to discount loans at the maximum rate, with-out regard to the actual yield, will not be affected. National banks located in states that permit state lenders to discount only to the extent that the actual yield is within the statutory maximum will need to change their practices merely by charging the statutory rate only …

Stock Options And The Tax Reform Act Of 1969: The Question Of Continued Utility, John W. Bonds, Jr.

Vanderbilt Law Review

This Note attempts its own exploration of the compensatory utility of stock options, beginning with brief sketches of the early tax law relating to options; the developing legislative, regulatory,and judicial refinements; and, the state of the law immediately prior to the Tax Reform Act. The basic operating provisions of the new Act and the proposed regulations are then examined as they relate to both statutory and nonstatutory stock options. After out-lining the goals that employers and employees seek by using stock options, the Note's conclusion attempts to analyze the degree to which those goals may still be attained in light …

Charitable Remainder Trusts--A Need For Further Reform?, R. Frank Murphy, Ii

Vanderbilt Law Review

The proposals offered in this Note are meant to suggest that are turn to some form of the flexible, well understood charitable remainder trust of pre-1969 days would prove most satisfactory to the needs of donors, charities, and attorneys. With modifications similar to those recommended above, the familiar concept of traditional income and remainder interests could be reinstated, with its weaknesses eliminated. If reversion to an improved form of the old law is deemed unacceptable,it nevertheless appears that a revision of the tripartite structure of the 1969 Act is mandatory. The complexity and lack of flexibility inherent in the new …

Taxation Of Gifts In Trust To Charities Reserving A Life Income Interest, Herman L. Trautman

Vanderbilt Law Review

The character of every nation is determined in large part by the values and beliefs of its people. A value high in the mores of American society is a settled policy decision to encourage gifts to charities. Governmental policy, federal and state, has been implemented for along time in various areas of the law by special provisions in favor of charity; and nowhere has the implementation of this policy been more pronounced than in our present tax laws, due in no small part to the high graduated income tax rates applicable to individuals. In order to encourage charities, Congress has …

Decedents' Estates, Trusts And Future Interests -- 1960 Tennessee Survey, Herman L. Trautman

Vanderbilt Law Review

The subject matter will be discussed under the three principal headings: Decedents' Estates, Trusts, and Future Interests. Since the legislature has not been in session during the year' covered by this survey, the developments in the subject areas of the law consist entirely of appellate court litigation. Most of the cases discussed in the section on Decedents' Estates involve problems of probate administration and procedure; there was only one case involving the substantive right of intestate succession and one case concerning the federal estate tax. The section on Trusts is practically non-existent this year, although one case is mentioned concerning …

Personal Property And Sales, F. Hodge O'Neal, Thomas G. Roady Jr.

Vanderbilt Law Review

Sales

Two sales cases were decided during the survey period. One of the cases, Henson v. Wright,' was an action by the buyer of a tractor to rescind the purchase for breach of warranty.

Judd v. Fruehauf Trailer Co. is a questionable decision which perhaps opens a way for a seller in a conditional sale contract to circumvent provisions of the conditional sales act designed to protect the conditional buyer.

Liability of Common Carrier: Is a carrier liable to a shipper for breach of contract for failure to deliver an animal lost en route from point of shipment to point …

Personal Property And Sales -- 1954 Tennessee Survey, Clyde L. Ball

Vanderbilt Law Review

This article is limited to cases involving transfers of personal property by gift or by sale, and the resultant legal relationships. Cases involving liens on personal property, chattel mortgages, and those dealing with sales in bulk are discussed in the article on Creditors' Rights and Security Transactions in this Survey.'

The Constitutionality Of The New Federal Estate Tax Definition Of A Transfer Taking Effect At Death, Charles L.B. Lowndes

Vanderbilt Law Review

The manifest reluctance in recent years on the part of the Supreme Court to declare any provision of the Federal Estate Tax unconstitutional may have given rise to the assumption that there are no constitutional limitations on the transfers which Congress can tax under the estate tax. One of the 1949 amendments to the tax should test the validity of this assumption. In an effort to bring some order out of the chaos stemming immediately from Helvering v. Hallock, and immediately from Spiegel's Estate v. Commissioner, Congress provided recently that a transfer after October 7, 1949, shall be deemed to …

The Effect Of Renunciations And Compromises On Death And Gift Taxes, Walter E. Black Jr.

Vanderbilt Law Review

When a man dies, it must be decided how his property shall be distributed. Ordinarily, the distribution will follow his express intention as evidenced in a will or the presumed intention of the state laws of intestacy. In these ordinary situations, the state death tax is applied to the various legacies and devises and to the property passing by descent in the manner provided by the state tax statutes. Thus, the majority of testamentary distributions are carried out without any state death tax problems.

However, in some cases, events occur after the death of the decedent which change the testator's …

Options And Valuation Of Property For Federal Tax Purposes, William J. Bowe

Vanderbilt Law Review

In Estate of John Q. Strange, there was an agreement between two brothers, engaged in business in a close corporation, which provided that upon the death of either, the survivor might acquire the stock of the other upon payment of $10,000 to his estate. Payment was so made following the decedent's death. The fair market value of the stock on the date of death was stipulated to be $238,126.54. The Board of Tax Appeals held that the option price of $10,000 was the proper amount to be included in the decedent's gross estate as the value of his stock.

In …

Will Renunciation Of A Bequest Or Failure To Claim A Statutory Share Constitute A Taxable Gift?, Daniel D. Canale, Robert E. Cooper

Vanderbilt Law Review

In 1948 the 80th Congress amended the Internal Revenue Code in an effort to eliminate the discrimination theretofore enjoyed by residents of states which had adopted the community property system.' Substantial equalization in the estate and gift tax fields is expected to follow from the marital deduction and "gift tax splitting" privileges. Moreover, these changes have focused attention upon a problem which caused considerable concern to conservative tax advisors even before the 1948 Tax Amendment. It has long been a doubtful question whether the renunciation of testamentary benefits would be held to constitute a taxable gift. The Act and the …

Book Reviews, Philip A. Hendrick, Charles L.B. Lowndes (Reviewer), Adrian W. Dewind (Reviewer), Chas. A. Morehead (Reviewer), John R. Stivers (Reviewer)

Vanderbilt Law Review

An Estate Planner's Handbook By Mayo Adams Shattuck

Boston: Little, Brown & Company, 1948. Pp. 575. $7.50

reviewer: Philip A. Hendrick

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Estate Planning and Estate Tax Saving By Edward N. Polisher

Philadelphia: George T. Bisel Company. Second Edition, 1948. 2 Volumes. Pp. xxxii, 923. $20.00

reviewer: Charles L.B. Lowndes

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Federal Taxes--Corporations and Partnerships, 1948-49 By Robert H. Montgomery, Conrad B. Taylor and Mark E. Richardson

Vol. I: Gross Income and Deductions Vol. II: Taxes, Returns and Administration New York: The Ronald Press Company, 1948. Pp. xiii, 1001; pp. iv, 881. $20.00

Federal Taxes--Estates, Trusts and Gifts, 1948-49

By …