Cory v. Clark

Opinion

FOGG, J.* This is an appeal by the executrix from an order fixing the inheritance tax in the matter of the estate of Anna E. Allgeyer, deceased. [171]The primary issue in this case is whether the decedent’s power to invade the corpus of a trust for her “reasonable support, care and comfort” is a general power of appointment subject to inheritance tax under section 13692 of the Revenue and Taxation Code.1

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Statement of Facts

On January 26, 1953, Herman E. Allgeyer executed a will which included a testamentary trust for the benefit of his wife, Anna E. Allgeyer. He died on December 17, 1963, and his will was admitted to probate. It provided in pertinent part, that: “I give, devise and bequeath the residue of my estate, In Trust, to my wife, Anna E. Allgeyer, to serve without bond, but in the event she predeceases me or fails to act or ceases to act, then to Bank of America National Trust and Savings Association, a national banking association, In Trust However, both as to my said wife, Anna E. Allgeyer, and said Bank of America National Trust and Savings Association, to be held, administered and distributed in accordance with the following provisions:

“(A) The entire net income from the Trust Estate shall be paid to or applied for the benefit of my wife, Anna E. Allgeyer, in monthly, quarterly or other convenient installments during her lifetime.

“(B) If aforesaid payments of net income from this trust to my said wife, Anna E. Allgeyer, shall be insufficient in the discretion of the Trustee to provide for her reasonable support, care and comfort, the Trustee may pay to her or apply for her benefit so much of the principal of the Trust Estate as it may deem proper or necessary for that purpose.” (Italics added.)

Anna Allgeyer acted as the testamentary trustee until April 4, 1969. Thereafter, the Bank of America National Trust and Savings Association was appointed successor trustee and acted in such capacity until Anna’s death on April 30, 1974.

The inheritance tax referee prepared and filed his report and included the trust assets for tax purposes. Appellant filed objections and after a hearing, the trial court concluded that the testamentary trust conferred a general power of appointment and that the trust assets were properly subject to California inheritance tax. This appeal ensued.