Estate of Farrel v. United States

The stipulated facts in this tax refund suit thrust upon us a narrow but knotty issue of estate tax law under Section 2036(a)(2) of the Internal Revenue Code of 1954.1 In 1961 Marian B. Farrel established an irrevocable trust with a corpus of various securities and her grandchildren as beneficiaries. Two individuals were named as trustees. They were given discretionary power to pay or apply all or part of the net income or principal to or for the benefit of any one or more of the beneficiaries (and their issue). The instrument also provided for a "time of division” when the *624corpus was to be…