On certiorari to the Prerogative Court, whose opinion is reported in 132 N.J. Eq. 230.
For the prosecutors-appellants, Walter E. Cooper.
For the defendant-respondent, David T. Wilentz, Attorney-General; William A. Moore.
Before Justice Case, Donges and Colie.
The opinion of the court was delivered by
CASE, J. The writ brings up for review a decree of the Prerogative Court determining that a transfer of securities by deed of trust made by Stephen H. Voorhees in his lifetime was made in contemplation of death (R.S. 54:34-1c) and determining, further, that the fair market value of the property as of the time of death should be included within the taxable estate of Mr. Voorhees for inheritance tax purposes.
Decedent died February 11th, 1940, at the age of seventy-five years and six months leaving a net estate to pass by his last will and testament of $231,942.52. At about the age of sixty he went through a prostatectomy operation and thereafter, in 1926, voluntarily retired on pension under the permissible rules of the banking institution by which he had been employed.
On March 28th, 1930, at the age of sixty-five, decedent executed an agreement by which he transferred certain securities of the then value of $460,000 and insurance policies on his life of the face value of $40,000 in trust during the lives of six named persons, of whom two were the donor's daughters and one was a grandson nine years of age, the income to be paid to the donor's wife during her life or until her remarriage and upon her death or remarriage the said income to be
paid $600 and $1,500, respectively, per annum, for life, to two relatives by marriage who were of the above mentioned six persons, $600 per annum, for life, to another of the six, who was a friend, and the balance in equal shares to the two daughters or their lineal descendants and upon their deaths to their descendants, and upon the death of the survivor of the six named persons the principal of the trust to be divided among the donor's grandchildren or their lineal descendants per stirpes; "or in case there should be no grandchild of the settlor nor any lineal descendant of a deceased grandchild of his then surviving, to the brother of the settlor, Dr. Irving Wilson Voorhees, and the sister of the settlor, Eleanor S. Voorhees, in equal shares, or if either of them be not then living, to convey, transfer and pay over the whole thereof to the survivor, or in case neither of them be then living to the National City Bank Club."
The decedent's last will was made January 5th, 1932. It left the testator's residence, his household furniture and personal effects and $20,000 in cash to his wife, $2,000 in trust for a church and the net balance, beyond cemetery charges, in trust to be held during four lives -- those of his wife, his two daughters and the grandson named above, the income to be paid to the testator's wife during her life or until her remarriage and then in equal shares to the two daughters or their lineal descendants, and upon the death of the survivor of the four named persons the principal of the trust to be divided amongst the testator's grandchildren or their lineal descendants per stirpes, and "in case there should be no lineal descendant of mine then surviving, to my brother, Dr. Irving Wilson Voorhees," &c., in the words of the corresponding clause in the trust deed, except that in the will the references to the testator are in the first person where in the trust deed the word "settlor" is used.
The scheme of and the beneficiaries under the will are, in essence, those of and under the trust deed. The market values at death were less than those at the time of the giving of the trust deed. The estimate given by the descendant's son-in-law was that the decedent was worth one million ...