Estate of Carlton v. Commissioner

SMITH, Circuit Judge.

Newcomb Carlton established a trust which was funded by certain securities and twenty-one life insurance policies, with a total face value of $237,620.00 on the life of the settlor. The trustees were directed to utilize the income from the securities to pay the premiums on the insurance policies and the grantor was to receive, during his life, any income in excess of that required to pay the premiums. In no calendar year from the inception of the trust in 1930, until the death of the decedent in 1953, were the dividends on the policies and the income from the securities…