Opinion
October 6, 1941.
Present — Lazansky, P.J., Hagarty, Johnston, Adel and Taylor, JJ.
In a transfer tax proceeding, the surrogate made an order confirming the pro forma tax order, which included as part of the assets of the estate the corpus of an irrevocable trust which the testatrix had created within two years prior to her decease. The executor appeals from the order of confirmation. Order of the Surrogate's Court of Kings County unanimously affirmed, with costs to respondent, payable out of the estate. At the time testatrix created the trust she undoubtedly had several motives corresponding to the many problems pressing upon her. The creation of the trust, in conjunction with the execution of her will, was intended as a solution of all her problems in the most economical and efficient manner. It clearly appears from all the proof that her dominant purpose in creating the trust at the same time that she executed her will was to make a final disposition of all her property to take effect after her death. It was a disposition in contemplation or expectation of death even though death at the time was not imminent. In view of the provisions of the trust agreement and the advanced age of the testatrix, she must have anticipated that in all probability the beneficiaries of the trust would receive the corpus thereof after her death. Under all the circumstances, it must be held that the trust in fact was merely a substitute for a testamentary disposition and as such it is taxable. (Tax Law, § 249-r; United States v. Wells, 283 U.S. 102.) In any event, the executor has failed to rebut the statutory presumption that the trust was created in contemplation or expectation of death. The motives shown by the executor were as consistent with a testamentary disposition as with an ordinary gift inter vivos. This is insufficient to rebut the statutory presumption. ( Land Title Trust Co. v. McCaughn, 7 F. Supp. 742; revd., 79 F. [2d] 602, which was reversed sub nom. McCaughn v. Real Estate Land Title Trust Co., 297 U.S. 606.) In our opinion the dominant purpose and motive of testatrix in creating the trust was to make a testamentary disposition.