Commissioner v. Wells Fargo Bank & Union Trust Co.

The Commissioner of Internal Revenue petitions to review a Tax Court decision concerning deductions allowable in computing federal estate tax.

Mary A. Hume died on December 20, 1940, By her will she left the residue of her estate in trust to her niece, Priscilla E. Shand, and to respondent, Wells Fargo Bank & Union Trust Company. The income of the trust fund was to be paid to her niece for life and on the niece’s death to various charitable organizations. The trustees were empowered to apply such part of the principal as they deemed reasonable to assist the niece in case of her need “on account of any sickness, accident, want or other emergency.” The problem presented is whether in computing the federal estate tax the amount of the charitable bequest may be deducted from the gross estate under § 812(d) of the Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code § 812(d), 1 and applicable Treasury Regulations.

*131 The Commissioner contends that, under a correct construction of the statute and regulations involved, “since the extent to which the trustee could invade the corpus for the benefit of the life tenant was not fixed in fact or capable of being stated in definite terms of…