Kuchel v. McIntosh

SHINN, P. J. Alice M. M. McIntosh died in the State of California in 1946. Her estate was left in trust with income [241]payable to her surviving husband, William A. McIntosh, for life. Upon the husband’s death the trust was to terminate and the residue, after the payment of certain bequests, was to go to Charity Organization Society Trustees, Limited, of London, England, to be used for the rehabilitation and relief of those rendered destitute or suffering distress by reason of the war in England. The executor of the will filed his first account current and report, and a petition for partial distribution, wherein it was represented to the court that Charity Organization Society Trustees, Limited, was in a critical financial condition due to deficits sustained over a period of years; that it had become known as Family Welfare Association, a British organization having its principal office and place of business in London, with no legal representative or office within the United States or elsewhere than in the British Isles; that for the reasons stated it was not a suitable trustee to be appointed by the court to take the residue of the estate in trust, and to administer it under the will of decedent; that Combined British Charitable Fund is a nonprofit California corporation; that said corporation was a suitable one to act as trustee under the will and was willing to act, and if appointed it might administer the fund either alone or in collaboration with or through the agency of Royal United Kingdom Beneficent Association, of London, England; and that for various reasons the court should retain jurisdiction over administration of the fund. The petition prayed for distribution to the California corporation of the residue of the remainder of the trust estate. Charity Organization filed an opposition to the petition, praying for distribution to itself to be used as it might see fit for the charitable purposes stated in the will. Additional facts were stated in an amended report and petition for partial distribution in support of the claim that the California corporation should be named as trustee, but they added nothing to the material facts which we have recited. Upon the hearing the account was settled and with the consent of Charity Organization Society Trustees, Limited, the residue of the remainder of the estate after the death of William A. McIntosh was distributed to Combined British Charitable Fund to be held and administered in accordance with the will of Mrs. McIntosh.

The controversy is over the claim made by the State Controller that the interest distributed to the California corporation is subject to an inheritance tax. This claim was