CHAPTER V.

§ 220, TAX LAW-IN CONTEMPLATION OF DEATH, OR INTENDED TO TAKE EFFECT AT

The General Subject.

176. Id.; when conveyance on cove-
nant to support grantor
not subject to transfer tax.
177. When the transfer of dece-

dent's right, title and in-
terest in real property by
trust deed is complete.

178. Assignment of insurance poli-
cies not a taxable transfer.

147. The General Subject.

§ 220

179. Where title under trust deed may vest absolutely in donor's life; not a transfer to take effect at or after death.

180. Trust deed; when not evidence of devise to evade the stat ute.

The statute relating to taxable transfers refers exclusively to the transfer of property by will or the intestate laws, except "when the transfer is of property made by a resident or by a nonresident when such nonresident's property is within this State, by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death." Subd. 4, § 220.

The provision referring to a transfer "made in contemplation of the death of the grantor, vendor or donor," was first inserted in the statute by chapter 215, Laws of 1891. The other provision referring to a transfer "intended to take effect in possession or enjoyment at or after such death," or words to that effect, was contained in section 1 of the original Act of 1885. Both of the foregoing provisions were necessary, as otherwise any one wishing to evade the tax might easily do so by a gift or grant of his whole estate immediately before his death, or by executing a written contract or agreement with the grantee or donee which would be effectual, upon such person's death, to pass the title to all his property to those who were to be the intended objects of his bounty.

148. Gifts Made in Contemplation of the Death of the Donor, etc.

Transfers contemplated by former subdivision 3, now subdivision 4, of section 220 of the Transfer Tax Law, necessarily require an examination of the facts surrounding a gift inter vivos, as well as those attending a gift causa mortis, although gifts inter vivos, when shown to be such, are not taxable.

149. Gifts Inter Vivos Joint Access to Property by Donor and Donee.

The New York Law Journal of June 6, 1907, contained the following note on gifts of this character:

"In Beaumont v. Beaumont, decided by the United States Circuit Court of Appeals, Third Circuit (March, 1907, 152 Fed. 55), it was held that where delivery of property as a gift has once been made, and possession transferred, the gift is irrevocable, and is not affected by the fact that the donor immediately thereafter comes into physical possession and control of the property without any retransfer of the ownership by the donee, and that a donor may attach a condition to a gift in præsenti, if that condition be not inconsistent with possession or control by the donee of the thing given.

"It appeared that the owner of fifty bonds rented a box of a safety deposit company in the name of himself and his two brothers, whom he took to the company, introduced them, and had them sign the contract of renting, and then retired with them to a room, taking the box and the bonds. He then handed one-half the bonds to each brother, stating that they were a gift, but that he desired the brothers to give him the coupons therefrom which should mature during his lifetime. After some conversation, they cut off some of the coupons next maturing, and gave them to him. They then placed the bonds and the coupons in the box, which was put in the vault, he taking one key, and giving them the other. It was held that the fact that he retained a key, and that he afterwards visited the vault and took coupons from the box was not such a retention of control over the bonds as to invalidate the gift."

150. Id. Deed Returned to Grantor to Be Recorded, Does Not Affect the Gift.

In the appraisal of the estate of Edward E. Suffern the appraiser included in his report of taxable transfers to one Mrs. Caroline Thompson certain bonds and the value of certain real estate aggregating $17,000, as

Id.; Circumstances Showing.

§ 220

a gift made in contemplation of death, and the surro gate's order imposed a tax of 5 per cent. upon such gifts and the other transfers to her by decedent's will. The testimony showed that the decedent lived in the home of the donee and her husband for upwards of ten years prior to his death and that he was ill during all of that time, and that for about four years before his death he gave the bonds and deed to Mrs. Thompson; that subsequently, and two or three years before his death, she returned the deed to him to be taken for record in the proper county clerk's office, but the deed was never recorded prior to decedent's death and was in his possession at the time of his death. On appeal by the legatee the surrogate modified his former order, holding that the evidence showed that certain coupon bonds and a deed to real estate were delivered by decedent to the appellant about four years before his death, and that she thereafter retained possession of the bonds and that the delivery of the bonds to the donee constituted a valid gift inter vivos; that the deed for the real estate was subsequently given by the grantee to the decedent for the purpose of having it recorded, and that as there was both delivery and acceptance of the deed with the intent to make it an effective conveyance of the real estate, it was a valid gift and vested the title to the property in the grantor, and that neither the bonds nor real estate was taxable. Matter of Suffern, N. Y. Law Journal, July 2, 1908, Surrogate Beckett.

151. Id. Circumstances Showing Valid Gift.

Where a husband signed, and had witnessed and delivered to his wife, assignments of certain corporate shares, together with the certificates representing them,

§ 220

Id.;

Memoranda in Support of.

and the wife placed them in the box in the deposit vault from which her husband had taken the certificates and he then delivered a key of the box to her and she thereafter paid the rental for the box, and where the husband over a year before had suddenly lost the use of his right hand, but after a few days partially recovered it, and was able to be around and continued successfully in business for six months after the gift and enjoyed good health for more than a year thereafter and lived for three years after the execution and delivery of the assignments, held, that the gift to the wife was valid and was not taxable under the law re lating to taxable transfers. Matter of Graves, 52 Misc. Rep. 433.

152. Id. Memoranda in Support of.

Where it appears that a decedent, upwards of a year prior to his death, stated to his counsel, who at that time prepared a codicil to his will, that he had for a number of years given his wife certain bonds and stocks from time to time on her birthday, at Christmas time and New Year's, the bonds being negotiable bonds and the stocks remaining registered in his own name, and that he had made out a statement, heading it "Property of Mrs. George H. Schinzel," and then added a list of the stocks and bonds, aggregating about $160, 000, and placed this statement in his safe deposit box leased in his own name and in the name of his wife. both of whom had keys to the box, the surrogate held that such bonds and stocks were no part of the estate of the decedent and therefore not taxable. Matter of Schinzel, N. Y. Law Journal, December 28, 1906 (citing Guion v. Williams, 7 N. Y. S. 786; affd., 125 N. Y 768; Gilkinson v. Third Ave. R. R., 47 App. Div. 472, Pink v. Church, 14 N. Y. S. 337; affd., 128 N. Y. 634).