OLD COLONY TRUST CO. V. UNITED STATES
423 F.2d 601 (1970)
NATURE OF THE CASE: This was an action to recover estate tax. Old Colony (P) appealed
from a decision in favor of the government in an estate and trust law tax action.
FACTS: The income of the trust at issue was payable to the settlor's son: eighty percent
of the income was to be paid to the son, and the rest was to be added to the principal. The
trust instrument gave the trustees absolute discretion to increase the percentage of income
payable to the son in case of illness or changed circumstances, or to decrease the payments
if they deemed it to be in the son's best interest. The trust instrument also gave the
trustees broad management powers and investment authority. During his life, the settlor was
also a trustee of the trust. Upon the settlor's death a tax was assessed against his estate
for the principal which settlor has contributed to the trust. The executor of the estate (P)
paid the tax and sued to recover the amount paid.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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