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Estate of Edward N. Opal v. Commissioner of Internal Revenue

decided: November 1, 1971.

ESTATE OF EDWARD N. OPAL, DECEASED, MAE OPAL, EXECUTRIX, NOW BY REMARRIAGE KNOWN AS MAE KONEFSKY, APPELLANT,
v.
COMMISSIONER OF INTERNAL REVENUE, APPELLEE



Friendly, Chief Judge, Waterman and Smith, Circuit Judges.

Author: Friendly

FRIENDLY, Chief Judge:

The Estate of Edward N. Opal appeals from a decision reviewed by the Tax Court holding that a bequest by the decedent to his wife under a joint will constituted a terminable interest under I.R.C. § 2056(b)(1) which was not within the exception provided by I.R.C. § 2056(b)(5) and therefore did not qualify for the marital deduction provided for by I.R.C. § 2056(a).

The joint will, executed on August 29, 1961, began by reciting that:

We, EDWARD N. OPAL and MAE OPAL, his wife, both residing at 85-19 Avon Street, Jamaica, Queens County, New York, both of us being of sound and disposing mind and memory and mindful of the uncertainty of this life, do make, publish and declare this to be our joint LAST WILL AND TESTAMENT, hereby agreeing, each of us with the other in consideration of the dispositive provisions hereinafter set forth, that this Will shall be irrevocable by either of us without the written consent of the other, and hereby revoking any and all former Wills and Codicils by us or either of us at any time heretofore made.

It continued:

Second: In the event Edward N. Opal predecease Mae Opal,

A. We direct that his just debts and funeral expenses be paid as soon after his decease as may be practicable;

B. All the rest, residue and remainder of the estate of Edward N. Opal, real, personal and mixed, and wheresoever the same may be situate, is hereby given, devised and bequeathed unto the said Mae Opal, absolutely and forever;

C. Thereafter and upon the death of said Mae Opal, and after the payment of her just debts and funeral expenses, all the rest, residue and remainder of the estate of said Mae Opal, real, personal and mixed, and wheresoever the same may be situate, is hereby given, devised and bequeathed unto our beloved son Warren Ian Opal, absolutely and forever.

There was a precisely similar provision, mutatis mutandis, to cover the event in which Mae predeceased Edward. A third article provided that if Edward and Mae died in a common accident or under circumstances leaving any doubt as to who had died first, their entire estates, after payment of debts and funeral expenses, should pass to Warren. Edward died on November 16, 1961; Mae survived. The estate tax return claimed the maximum marital deduction. The Commissioner disallowed this, a divided Tax Court affirmed, 54 T.C. 154 (1970),*fn1 and this appeal followed.

In providing for the marital deduction, § 2056 of the Internal Revenue Code of 1954 lays down, in subsection (b)(1), the following general rule:

(1) General rule. -- Where, on the lapse of time, on the occurrence of an event or contingency, or on the failure of an event or contingency to occur, an interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed under this section with respect to such interest --

(A) if an interest in such property passes or has passed (for less than an adequate and full consideration in money or money's worth) from the decedent to any person other than such ...


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