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§ 220

Transfers by Antenuptial Agreement.

taxation as though the gift were in the possession of a corporation or association already formed under the will.

129. Legacy Is a Naked Right until Reduced to Possession.

Until a legacy is reduced to possession it is a mere naked right in an estate to be administered, and is not subject to tax. Matter of Phipps, 77 Hun, 325, 28 N. Y. S. 330; affd., 143 N. Y. 641.

130. Transfer of Property by Antenuptial Agreement.

On April 7, 1893, Miller made an antenuptial agreement in writing, reciting his intended marriage to a Miss Tefft, and his desire to make pecuniary provision for her, whereby he transferred to her 2,000 shares of the preferred capital stock of the Phoenix Horse Shoe Company of Illinois. On April 8, 1893, one day there. after, Miller and Miss Tefft entered into another agreement, whereby," in consideration of the intended intermarriage of the parties," Miss Tefft transferred unto Miller the above 2,000 shares of stock, upon the trust to invest and reinvest the same and change the investment with her approval, and Miller was to receive and apply to the mutual use of both parties the income arising therefrom during their joint lives. Upon the death of either the trust was to terminate, and if Miss Tefft died first the trust fund was then to become the property of Miller absolutely, free from all trusts and conditions, and the same condition was made for Miss Tefft if Miller died first. The parties were married on April 8, 1893, after the execution of the trust agreement. Miller died on January 19, 1901, leaving his wife surviving, and also a will, in which he referred to the transfer to his wife and gave her all the right,

Transfers by Contract Obligations.

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title, and interest he might have, if any, in and to the 2,000 shares of stock aforesaid. The court held that the property transferred was not subject to tax, it appearing that the two agreements were not contemporaneous, and that the original transfer was for a good and valid consideration. Matter of Miller, 77 App. Div. 473, 78 N. Y. S. 930.

In the Matter of Baker, 83 App. Div. 530, 82 N. Y. S. 390; affd., 178 N. Y. 575, the decedent entered into an antenuptial agreement with his intended wife, by which he agreed that if the marriage should occur, and she should survive him, he would make provision by his will for the payment to her from his estate of $20,000. His intended wife agreed to accept the provision of the agreement in lieu of her dower and other rights in her husband's estate. Their marriage subsequently occurred and the husband died intestate, leaving his widow and a sister surviving. By agreement the widow accepted, in part payment of the $20,000, the avails of a $10,000 life insurance policy upon her husband's life, which had been transferred to her prior to her husband's death, and the remaining $10,000 was subsequently paid to her from her husband's estate. Held, that the claim of the widow for $10,000 under the antenuptial agreement was in the nature of a debt, and therefore not taxable as a transfer made in contemplation of the death of the donor, or intended to take effect in possession or enjoyment at or after such death.

131. Property Transferred by Reason of Contract Obligations, Held Not Taxable.

Property, passing to the natural daughter of an intestate dying in 1900, under a judgment of the Su

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preme Court, awarding to her in 1901 specific performance of a contract her father made with her mother in 1862, by the terms of which, upon surrender of the natural daughter to him, his property remaining at his death should belong to her, is not subject to the transfer tax, as the transfer was neither by will nor by the intestate laws, or by bargain and sale or gift made in contemplation of death, or to take effect in use or enjoyment thereafter. Matter of Demers, 41 Misc. Rep. 470, 84 N. Y. S. 1109.

132. Advancements.

The court says in the Matter of Edgerton, 35 App. Div. 125-130, 54 N. Y. S. 700; affd., 158 N. Y. 671: "It is hardly claimed that a gift inter vivos or an advancement simply, would be within the provision of the law." Matter of Spaulding, 49 App. Div. 541, 63 N. Y. S. 694.

133. Id.; When Provisions of Decedent's Will Cancel the Advancement.

Where a deposit is made by a widow of a sum in trust, to be paid over on her death to her niece, in consideration of the withdrawal of a contest of her husband's will which the niece had instituted, with conditions that if any share of her estate went to the niece the sum deposited should be "treated as an advance upon account of such share and reckoned accordingly," the sum deposited is to be regarded as an advancement.

But when the widow by a will executed subsequently left for the niece a sum in trust and a legacy in the residuary given first to her mother, who predeceased the testatrix, and no reference was made in the will to

Id.; When Loans and Not Gifts.

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the advancement, the agreement under which the advancement was made should be construed as referring to a deduction from the niece's share in her aunt's estate in case the latter died intestate, and by leaving a will in such form the testatrix indicated an intention on her part to cancel any obligation with respect to the advancement. Bowron v. Kent, 190 N. Y. 422.

134. Id.; When Loans and Not Gifts.

An essential incident to constitute an advancement is that there shall have been an absolute gift of the fund; that is to say, an absolute surrender of all dominion and control over the same.

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Where a decedent in her will provides that" against the share of my estate herein left to my sons, who shall survive there shall be charged all amounts which I may have advanced to them or for their benefit respectively upon my books, including any and all amounts which I may have loaned to them respectively, whether upon security or without security, so far as the same shall not be paid, together with interest upon such sums from the time of the loan or advance," it was held that such advances were loans and not gifts or advancements, but rather debts due the decedent's estate, and were properly included in the appraiser's report as assets of the estate. Matter of Dodge, N. Y. Law Journal, May 13, 1904, Surrogate Fitzgerald.

135. When Unused Income Is Part of Original Testator's Estate.

In the Matter of Van Scoy, affd., 81 App. Div. 655, it appears that the decedent Margaret Van Scoy died March 15, 1900, a resident of Steuben county. Her

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husband, who predeceased her, left a will giving her the use, income, and profits of his personal estate for and during her natural life, and at her death he gave the whole amount of said rest, residue, and remainder of said personal estate (herein bequeathed to my said wife's use during her life) to two certain legatees named in his will equally. On the appraisal of the life tenant's estate it was conceded that there was an accumulation of $4,281.07 of the "use, income, and profits" to which the life tenant was entitled, but which had not been used by her and which had been invested in her name and another as executors of the estate of the deceased husband. The appraiser considered this sum of money as property belonging to the estate of the husband, and the amount thereof was not included in the order assessing tax on the life tenant's estate. The Comptroller appealed and the surrogate affirmed his order, which in turn was affirmed by the Appellate Division of the Fourth Department.

136. Remainders and Reversions under the Earlier Law.

Remainders and reversions created before the Transfer Tax Law, although vesting in possession or enjoy. ment thereafter, are not taxable, as the right of the State attaches when the right of succession accrues. Matter of Seaman, 147 N. Y. 69; Matter of Gibson, 33 App. Div. 628, 53 N. Y. S. 1104; affd., 157 N. Y. 680; Matter of Langdon, 11 App. Div. 220, 43 N. Y. S. 419; affd., 153 N. Y. 6.

137. Chose in Action - When Taxable.

Where a legatee dies before receiving his legacy or distributive share, no transfer tax can be imposed upon this portion of the legatee's estate until the settlement of the estate of the decedent in which the legacy or dis

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