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A bequest to a home for consumptives, the inmates of which are supported by charity, has been held not liable to the New York legacy tax. And a bequest to a hospital for the care and treatment of the indigent sick and disabled is exempt as a gift to an almshouse."1

§ 152. Cemetery Association.-A bequest to a cemetery corporation of another state, the interest to be used for the purpose of keeping the testator's "lot in good condition forever," has recently been held subject to the New York transfer tax.62 This holding

60 Will of Herr, 57 Hun, 591, 10 N. Y. Supp. 680.

61 Estate of Curtiss, 1 Con. 471, 7 N. Y. Supp. 207.

62 Estate of Fay, 62 Misc. Rep. 154, 116 N. Y. Supp. 423, Said the court in this case: "In Matter of Vinot's Estate, 7 N. Y. Supp. 517, Surrogate Ransom held that a bequest of one thousand dollars to an association, the income of which was to be applied to the care and preservation of the burial plot of a decedent, was not taxable. As this decision has not been overruled by a higher court, it might be considered as a controlling authority in this case. In view, however, of the language of the court of appeals in the Gould case, 156 N. Y. 423, 51 N. E. 287, and of the appellate division in the McAvoy case, 112 App. Div. 377, 98 N. Y. Supp. 437, it would appear that the decision in the Matter of Vinot would scarcely meet with the approval of the appellate courts at the present time. In the Gould case it was held that the property was taxable, although bequeathed for the purpose of satisfying a contractual obligation existing at the time of decedent's death; and in the McAvoy case it was held that the bequest was taxable, although the beneficiary received it in payment of services to be rendered hereafter. While it has been held that a sum spent by an executor in the erection of a monument to decedent is exempt (Matter of Edgerton's Estate, 35 App. Div. 125, 54 N. Y. Supp. 700), and that a reasonable sum spent in the purchase of a burial plot for decedent may be regarded as a part of the funeral expenses and therefore a proper deduction (Matter of Liss' Estate, 39 Misc. Rep. 123, 78 N. Y. Supp. 969), there is a manifest distinction between such expenditures made by an executor in nis discretion and a bequest made by decedent in his last will to a certain beneficiary and for a certain specific purpose. In the latter case the property passes to the beneficiary, by virtue of the provisions in decedent's will, and as the statute provides that all property passing by will (if not going to parties specifically mentioned as being exempt) is taxable, the bequest to the Mt. Auburn Cemetery Association would seem to be taxable."

seems to be in conflict with a prior decision in the same state.63

64

§ 153. Masses for Repose of Souls.-It has once been affirmed in New York that a bequest to the Roman Catholic church for masses to be read for the repose of the soul of the testatrix is exempt from the transfer tax. But on another occasion it was decided that a bequest to executors in trust to expend for masses for the repose of the soul of the testatrix and her husband was subject to the tax imposed by the collateral inheritance act.65 On a subsequent occasion it was held that a direction to executors to expend, in their discretion, a certain sum for masses for the repose of the soul of the testatrix was a gift to the executors for a religious use upon a valid and effectual trust, and that the transfer should be taxed at the rate of five per cent. A mass is not necessarily a part of the funeral service, and hence a bequest to a priest to say masses is not exempt from the transfer tax as a funeral expense.67

66

Bequests for masses have been pronounced for charitable purposes in California, and therefore held exempt from the inheritance tax."

67a

§ 154. Societies for Prevention of Cruelty.-Bequests for the benefit of a society for the prevention of cruelty to animals are for a public charity." An in

63 Estate of Vinot, 7 N. Y. Supp. 517. For Pennsylvania decisions on this question, see Hurst v. Cookman, 1 Lanc. Law Rev. 60; Estate of Walters, 1 Pa. Co. Ct. Rep. 447; Estate of Long, 22 Pa. Super. Ct. 370.

64 Estate of Didion, 54 Misc. Rep. 201, 105 N. Y. Supp. 924.

65 Estate of Black, 1 Con. 477, 5 N. Y. Supp. 452.

66 Estate of Eppig, 63 Misc. Rep. 613, 118 N. Y. Supp. 683.

67 Estate of McAvoy, 112 App. Div. 377, 98 N. Y. Supp. 437.

67a Estate of Herzo, 2 Cof. Pro. Dec. 165.

68 Minns v. Billings, 183 Mass. 126, 97 Am. St. Rep. 420, 5 L. R. A., N. S., 686, 66 N. E. 593.

stitution whose purpose is so laudable and humane, and therefore so worthy of encouragement, is quite as much entitled to exemption from the inheritance tax as many other charities that enjoy such exemption. But in New York, though the decision was rendered nearly a quarter of a century ago, it was decided that a bequest to a society for the prevention of cruelty to animals was subject to the legacy tax. And recently it has been held in that state that a testamentary gift to a society for the prevention of cruelty to children is not exempt from the transfer tax.7°

69 Estate of Keith, 1 Con. 370, 5 N. Y. Supp. 201.

70

70 Estate of Moses, 138 App. Div. 525, 123 N. Y. Supp. 443.

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CHAPTER X.

CIRCUMSTANCES AFFECTING LIABILITY FOR TAX.

§ 158. Compromise of Will Contest or Litigation-Pennsylvania Decisions.

§ 159. Compromise of Will Contest-Illinois Decisions.

§ 160. Compromise of Will Contest-New York Decisions.

§ 161. Compromise of Will Contest-Iowa Decisions.

§ 162. Compromise of Will Contest-Massachusetts Decisions.

§ 163. Compromise of Will Contest-Other Decisions.

§ 164. Renunciation or Waiver of Legacy.

§ 165. Compensation to Executor or Trustee.

§ 158. Compromise of Will Contest or Litigation— Pennsylvania Decisions.-A compromise of litigation or of a will contest cannot be resorted to as a mere device for evading the payment of an inheritance tax; for courts look beyond the form of any arrangement, whereby the commonwealth is deprived of a tax, to its substance to ascertain its real purpose. Hence an agreement to set aside a will and to make distribution in accordance with its provisions or otherwise will not relieve legacies otherwise taxable from the burden which the law imposes upon them. But the view prevails in Pennsylvania that money paid in good faith in compromise of threatened litigation or of a will contest is not subject to the legacy tax.1

It has been decided in that state that the collateral inheritance tax is not payable on the money which legatees, who are collaterals, authorized the executor

1 Estate of Hawley, 214 Pa. 525, 6 Ann. Cas. 572, 63 Atl. 1021. In Appeal of Commonwealth, 34 Pa. 204, the testator devised his entire estate to his executors in trust for legatees and devisees; the widow declined to take her legacy, but afterward, by an arrangement with the executors approved by the court, accepted a sum less than her share of the estate and relinquished her claim to the residue. It was held that she took this sum under her paramount title as a widow, not out of the fund bequeathed in trust, and therefore that it was not subject to the collateral inheritance tax.

to pay to a disinherited son of the decedent, in pursuance of a compromise by which the son's caveat was withdrawn and the will admitted to probate; 2 and that such tax cannot be imposed upon money paid to extinguish the title of persons who claim adversely to the decedent, or upon property surrendered by way of compromise to persons who so claim. The theory of the first of these decisions appears to be that the portion of the estate that passed to the son was never accepted by the legatees, and that a bequest is not effectual without acceptance. In the second decision the court declared that "no liberality of construction can extend the language of the statute so as to make it include either moneys paid to extinguish the title of persons claiming adversely to the decedent, whose estate is liable to taxation, or property surrendered by way of compromise to persons so claiming, and thus never forming part of decedent's estate at all.”

§ 159. Compromise of Will Contest-Illinois Decisions. The Illinois court has declined to assent, to the

2 Estate of Pepper, 159 Pa. 508, 28 Atl. 253. In this case the will gave the estate to collateral kindred and strangers, and to avoid a contest they yielded a portion of the estate to a son. The issue was whether this portion was subject to a tax. In deciding in the negative, the court said: "We have reached the conclusion that under the most favorable construction of the act, so far as respects the contention on behalf of the commonwealth, they are not so liable, and for the reason that the amount paid caveator was never received by them as legatees, and under the act it is only so much of the estate which actually passes to them by virtue of the will that is liable to the tax. It will readily be seen, if the contest instituted by the caveator had been successful, he would be entitled under the intestate law to the entire estate, and freed from the tax; but, instead of further litigation, he accepted a portion of the estate, relinquished his claim to the balance, and thus, of course, reduced the amount passing to the legatees, and, in fact, to the extent of the amount he received, the will is a nullity, so that all the legatees take is the amount of their bequests after deducting the sum paid the caveator and this they concede is subject to the tax."

& Estate of Kerr, 159 Pa. 512, 28 Atl. 354.

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