Estate of Floy M. Christensen - Page 24

                                       - 24 -                                         
          preserved by RCWA 33.22.130.  On the record before us, we reject            
          the position of the estate that the gift tax regulations on which           
          the estate relies establish that the payees shown on the November           
          1995 checks and the January 1996 checks were the recipients of              
          gifts from decedent.                                                        
               Based on our examination of the entire record before us, we            
          find that the estate has failed to show that decedent (or a                 
          legally appointed representative acting on behalf of decedent)              
          could not have revoked the transfers of funds that decedent’s               
          children made by the issuance of the November 1995 checks and the           
          January 1996 checks.7  We further find on that record that the              

               7Respondent argues in the alternative that, assuming                   
          arguendo the Court were to find that decedent authorized Mr.                
          Christensen and Ms. Hastie to make gifts of the amounts of funds            
          withdrawn by the November 1995 checks and the January 1996                  
          checks, four of those checks (i.e., check Nos. 1363, 1364, 1834,            
          and 1835) were not cashed prior to decedent’s death.  Conse-                
          quently, according to respondent, those four checks did not                 
          result in completed transfers as of the date of decedent’s death            
          and are includible in decedent’s gross estate.  We agree.  See              
          Estate of Gagliardi v. Commissioner, 89 T.C. 1207, 1211-1213                
               A gift is not consummated until it is placed beyond the                
          donor’s recall.  See sec. 25.2511-2(b), Gift Tax Regs.  State law           
          determines whether decedent parted with dominion and control over           
          the funds in the Seafirst joint account that were withdrawn by              
          the November 1995 checks and the January 1996 checks.  See Estate           
          of Dillingham v. Commissioner, 88 T.C. 1569, 1575 (1987), affd.             
          903 F.2d 760 (10th Cir. 1990).  Under the law of the State of               
          Washington, where a donor uses a check to make a gift, the donor            
          does not immediately relinquish control over the funds repre-               
          sented by the checks.  See Wash. Rev. Code Ann. sec. 62A.3-408              
          (West 1995).  Delivery of the check will not perfect a monetary             
          gift because the donor may stop payment or withdraw all the funds           
          in the bank account, thereby effectively revoking the gift.  See            

Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  Next

Last modified: May 25, 2011