United States v. Ashby O. Stewart, of the Last Will and Testament of Mary W. Stewart, Deceased

Plaintiff seeks recovery of federal estate taxes paid on decedent’s interest in certain life insurance and annuity policies.

Ashby and Mary Stewart were married in 1906 and their marital relationship continued until Mary’s death on February 21, 1951. They were residents of California. At the time of the wife’s death there were 26 insurance and annuity policies on the life of the husband, and seven annuity policies naming the wife as annuitant. The premiums on all of the policies were paid with community property funds.

Two questions are presented: (1) whether one-half of the cash value of the 26 policies on the life of the husband was properly includable in the wife’s gross estate; and (2) whether all, or one-half, of the proceeds of five of the annuity policies in the name of the wife should be included. 1

Policies on Husband’s Life

The Government contends that under the California law the decedent had a vested ownership interest of one-half of the cash value of the 26 policies on her husband’s life, and that the policies are accordingly includable under Section 811 (a), Int.Rev.Code of 1939 2 to the extent of her interest, and if not includable under § 811(a), her interest…

On Petition by Appellee for Rehearing

Before POPE, Circuit Judge, and JAMESON, District Judge.

Appellee has filed a petition for rehearing and has requested that action thereon be deferred until Estate of Mendenhall, decided by the Superior Court of the State of California, in and for the County of San Diego, has been reviewed by the appellate court. In our opinion we stated that the outcome of any appeal in the Mendenhall case would not affect our decision. Is that conclusion justified?

Pursuant to § 811(a) Internal Revenue Code of 1939, 26 U.S.C.A. § 811 (a), the value of the gross estate of the decedent for federal estate tax purposes is determined by including the value of all property (except real property outside of the United States) “to the extent of the interest therein of the decedent at the time of his death * * Testamentary disposition is not required, and the tax is not imposed upon the right of receiving property by inheritance. On the other hand, the state inheritance tax of California is imposed “either on the transmission or the exercise of the legal power of transmission of property by will or descent, or on the legal privilege of taking property by will or…

270 F.2d 894 59-2 USTC P 11,884 UNITED STATES of America, Appellant, v. Ashby O. STEWART, Executor of the Last Will and Testament of Mary W. Stewart, Deceased, Appellee. No. 16014. United States Court of Appeals Ninth Circuit. June 18, 1959, Rehearing Denied Sept. 28, 1959. Charles K. Rice, Asst. Atty. Gen., Helen A. Buckley, Lee A. Jackson, A. F. Prescott, Attorneys, Dept. of Justice, Washington, D.C., Lynn J. Gillard, U.S. Atty., San Francisco, Cal., for appellant. George H. Koster, Richard W. Graham, San Francisco, Cal., for appellee. Before DENMAN, Senior Circuit Judge, POPE, Circuit Judge, and JAMESON, District Judge. JAMESON, District Judge. Plaintiff seeks recovery of federal estate taxes paid on decedent's interest in certain life insurance and annuity policies. Ashby and Mary Stewart were married in 1906 and their marital relationship continued until Mary's death on February 21, 1951. They were residents of California. At the time of the wife's death there were 26 insurance and annuity policies on the life of the husband, and seven annuity policies naming the wife as annuitant. The premiums on all of the policies were paid with community property funds. Two questions are…