Colletta Lake Ray v. United States

Shortly before his death, Robert H. Ray authorized Jack C. Pollard, acting as Ray’s agent, to borrow $1,000,000 from the First City National Bank for the purpose of purchasing $1,270,000 par value United States Treasury Bonds. These bonds, known colloquially as “flower bonds,” contained a provision making them redeemable at par prior to maturity to pay federal estate taxes, provided they were owned by the decedent at death and were included in his gross estate. 1 On December 26, 1967, Pollard signed a promissory note for $1,000,000 in which the bank acknowledged that the proceeds of the loan…