OPINION.
Phillips:
In determining the deficiency the Commissioner has included as a part of the taxable estate of the decedent the value of 5,000 shares of the capital stock of the Fall River Bleachery, set aside by the decedent in a trust fund some five months prior to his death. This has been done pursuant to the provisions of section 402 of the Revenue Act of 1918, which provides that the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated:
(c) To tlie extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has at any time created a trust,**in contemplation of or intended to take effect in possession or enjoyment at or after his death (whether such transfer or trust is made or created before or after the passage of this Act), except in case of a bona fide sale for a fair consideration in money or money's worth. Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death without such a consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title.
It is undisputed that the trust was not intended to take effect in possession or enjoyment at or after the death of the decedent and the sole question is whether the trust was established by the decedent in contemplation of death.
In Spreckels v. State, 30 Cal. App. 363; 158 Pac. 549, the District Court of Appeals, Third District, California, in a well considered opinion, said with reference to the words "in contemplation of death ":
The language referred to was not intended to include that general expectation of death which is the essential concomitant of the inherent knowledge of the inevitable termination of all life, and which is in the young and physically robust as well as in the aged and the infirm. No similar statute has been so construed. A reasonable and just view of the law in question is that it is only where the transfer of property by gift is immediately and directly prompted by the expectation of death that the property so transferred becomes amenable to the burden; or, as counsel for the respondent with singular aptness states the proposition:
"It is only when contemplation of death is the motive without which the conveyance would not be made that a transfer may be subjected to the tax."
This statement of the law is abundantly borne out by the authorities. Shwab v. Doyle, 269 Fed. 321; Rea v. Heiner, 6 Fed. (2d) 389; Vaughan v. Riordan, 280 Fed. 742; Rosenthal v. People, 211 Ill. 306; 71 N. E. 1121; Commonwealth v. Fenley, 189 Ky. 480; 225 S. W. 154.
The evidence convinces us that in the present instance the trust was not established by the decedent in contemplation of his death. The evidence shows the decedent in 1921 to have been an active man, taking an interest in the conduct of his business; giving attention to two stock farms which he operated more as a hobby than a business, playing golf and riding horseback. He was conscious of a shortness of breath after exertion and a " skipping " of his heart. This condition does not appear to have concerned him other than as it interfered to some extent with the things which he desired to do. While at his farm at Woodstock in April, 1920, he consulted a local physician. This physician found signs of heart trouble but no serious condition and advised the decedent to lead a less strenuous life. A month later he consulted his regular physician who gave him much the same advice. The decedent refused to permit a general examination, stating that he felt all right except for shortness of breath, and failed to follow the advice given him. Some seven months later he again consulted his physician regarding the same condition. The physician found that the condition had progressed slightly and prescribed a heart stimulant. The physician again desired to make a thorough examination which the decedent refused to permit. The decedent apparently did not regard his condition as serious nor did the physician, provided the patient would take reasonable care of himself. The testimony of the physician is that he found the condition of the decedent better than that of the average man of his age and that there was no reason why, with proper care, the decedent should not have lived several years.
In the early winter months of 1921 the decedent went to his place at Augusta, Ga., as was his custom, and there followed his usual active pursuits, playing golf and riding. At no time does it appear that he considered his condition as sufficiently serious to follow the advice given him by his physician. The whole record in the case convinces us that the decedent did not at the time of the execution of the trust consider his condition serious or look forward to an early demise.
When we come to examine the circumstances under which the trust was created, we find that it was not a hasty act brought on by the realization of impending death but the culmination of many months of effort to work out some plan whereby his income taxes might be reduced. The first step was taken in 1919 when his salary from the Bleachery was materially reduced. The saving effected by this step could not have been large and some other means of reducing taxes was sought. The evidence shows that various plans were suggested and discussed, and it was not until after several months of consideration that the plan finally followed was adopted. Even after this plan had been adopted several weeks were spent in drafting and redrafting the declaration of trust to meet the requirements of the testator.. The plan was adapted to the purpose of saving income taxes by providing a capital fund from which would be paid the amounts theretofore paid directly by the decedent to his wife and children, and all the surrounding circumstances lend support to the uncontradicted testimony that the purpose of the trust was to reduce the income taxes.
To our mind the record is convincing that the trust had a purpose other than the saving of estate taxes and was not made by the decedent in contemplation of his death.
Decision will be entered on 15 da/ys' notice, under Bule 50.