TAXATION-ESTATE TAX-RESERVATION OF POWER TO AMEND TRUST

Settlor executed a trust indenture in 1915 whereby a trust was established for the benefit of his three minor children. Income was to be accumulated for the benefit of the three children until they respectively attained majority, and provision was made for the death of any child under 21 without surviving issue. The settlor then reserved "the power from time to time by an instrument in writing signed by me to amend this trust instrument so that it will more clearly express my actual intentions if I shall consider such amendments advisable, as to which I shall be the sole judge." The commissioner determined that this reserved power constituted a power to amend within the provisions of section 811 (d) (2) of the Internal Revenue Code, and that the corpus was therefore subject to the estate tax. Plaintiff, settlor's executor, paid the assessment and sued in the district court to recover the payment.

The district court held for the United States. On appeal, held, reversed. Theopold v. United States, (C.C.A. 1st, 1947) 164 F. (2d) 404.