151 A.D. 539

In the Matter of the Appraisal of Property under a Deed of Trust Dated August 21, 1909, Made by Martha A. Webber to Morris E. Webber and John Webber, Respondents, under the Acts in Relation to the Taxable Transfers of Property. William Sohmer, Comptroller of the State of New York, Appellant.

Second Department,

June 14, 1912.

Tax — transfer tax on property passing under trust deed.

The law in effect at the time that the right of succession under a trust deed becomes fixed is the law which governs infixing the amount of the transfer tax. The time when the beneficiaries actually come into the enjoyment of the fund is of no consequence.

The tax upon property passing under such a deed should be assessed under the statute in force at the date of the delivery of the deed; not under an • amendment in force at the grantor’s death.

Appeal by William Sohmer, Comptroller of the State of New York, from an order of the Surrogate’s Court of the county of Westchester, entered in said Surrogate’s Court on the 21st day of February, 1912, modifying and amending an order of said court entered on the 16th day of June, 1911, fixing and assessing a transfer tax.

Winfield L. Morse [ John J. Sinnott with him on the brief],, for the appellant.

Edgar L. Ryder, for the respondents.

Woodward, J.:

John Webber died on the 15th day of June, 1909, leaving all of his estate, both real and personal, to his widow, Martha A. Webber, and the transfer tax upon this succession has been paid. On the 21st day of August, 1909, Martha A. Webber, the widow of the said John Webber, made, executed and delivered to Morris E. Webber and John Webber a deed in trust, reserving to herself the income of the estate transferred by such deed during her natural life. This deed was made for the purpose of giving effect to a proposed will which John Webber, *540deceased, had failed to execute, and appears to have been the result of a mutual arrangement. The trust deed, after providing for the expenses of the trust and other like matters, with a life use of the income, gave three-sixteenths to • Morris E. Webber absolutely, and a like sum to John Webber absolutely, and then provided for certain trusts for the benefit of other members of the family, with provisions for the distribution of the same upon the terminations of the trust' periods, the details not being essential to the question here presented. At the time of the delivery of said trust deed on the 21st day of August, 1909, the Tax Law (Consol; Laws, chap. 60 [Laws of 1909, chap. 62] § 221), relating to taxable transfers, fixed a tax of one per centum upon the clear market- value of such property passing to or for the use of children. Martha A. Webber died in October, 1910, and in July of that year chapter 106 of the Laws of 1910, which amended, among other provisions, section 221 of the Tax Law, came into effect, largely increasing the transfer tax, and. the question presented upon this appeal from an order of the surrogate of Westchester county, finally fixing the transfer tax under the provisions of chapter 62 of the Laws of 1909, which was the law in effect at the time of the making and delivery of the trust deed, is whether the tax should be fixed as of the date of the making and delivery of the deed, under the then existing law, or under the provisions of the law as it existed at the time of the death of Martha A. Webber.

We are clearly" of the opinion-that the learned surrogate has properly disposed of this question. When the trust deed was made and delivered, without reserving any right to change the same, the right of succession became fixed, and it is this right of succession, and not the property, which is the subject of this tax. (Matter of Swift, 137 N. Y. 77, 88.) The law in effect at the time that the right of succession became fixed is the law which governs in a case of this kind, and the question as to when the beneficiaries actually come into the enjoyment of the fund is of no consequence. The beneficiaries under this trust deed took their rights as of the day of the delivery of the deed; their rights were fully established, subject to the contingencies provided therein, and those who should finally take *541became entitled thereto upon the payment of the tax provided for the transfer at the date of the delivery of the deed, and there can be no justification for construing chapter 706 of the Laws of 1910 to relate back to this transfer and to fix the tax therefor. The fact that the deed was made in contemplation of death, if this be true, operates, of course, to give a right of taxation upon the succession (Tax Law, §§ 220, 221), but it does not operate to make this deed in effect a will, to become operative upon the death of Martha A. Webber. The deed became operative immediately upon its delivery with the intention of vesting title in the trustees for the purposes of the trust, which provided for the final distribution of the property, and only the benefits were postponed to the happening of a particular event, and the law of that contract must be determined by the law as it existed when the deed became effective.

The order appealed from should be affirmed, with ten dollars costs and disbursements.

Burr, Thomas and Rich, JJ., concurred; Jenks, P. J., not voting.

Order of the Surrogate’s Court of Westchester county affirmed, with ten dollars costs and disbursements.

In re the Appraisal of Property under a Deed of Trust Dated August 21, 1909, Made by Webber
151 A.D. 539

Case Details

Name
In re the Appraisal of Property under a Deed of Trust Dated August 21, 1909, Made by Webber
Decision Date
Jun 14, 1912
Citations

151 A.D. 539

Jurisdiction
New York

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