Waechter

The United States appeals from a judgment awarding a refund of a portion of the estate tax paid by appellees as executors of the estate of one May Waeehter.

Mrs. Waeehter, a resident of the state of Washington, died February 20, 1947, leaving her husband surviving. During her lifetime the husband had taken out three policies of insurance on his own life, in all of which his wife was named as beneficiary with certain contingent beneficiaries in the event she was not living at the time of insured’s death. These policies were in effect when the wife died.

It was stipulated that the premiums thereon had been paid with community funds. Under the law of the state of Washington, the premiums on the policies having been paid from community funds, the policies constituted community property of decedent and the husband. In the estate tax return the executors included as part of the gross estate one-half the cash surrender value of the policies. Later they claimed a refund of the amount paid on account of the surrender value, and upon rejection of the claim they brought this suit.

The theory on which the government defended below appears to have been simply that the cash surrender value…