Kentucky Trust Co. v. Department of Revenue

CLAY, Commissioner.

This is an appeal from a judgment affirming an order of the Kentucky Tax Commission imposing an inheritance tax on the proceeds of a life insurance policy held in trust subject to a power of appointment.

Frank Brandon, prior to his death in 1960, had entered into a life insurance trust agreement with appellant as trustee. It provided that the insurance proceeds should be divided into Trust A and Trust B. His widow was the income beneficiary of both trusts for life, with power in the trustee to encroach on the principal for her benefit, first from Trust A and then Trust B.…