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including those set forth in the following excerpt from the
Supreme Court’s rejection of the Government’s arguments in that
case:
At the outset we observe that this Court has never
held that trust property must be included in a
settlor’s gross estate solely because the settlor
retained the power to manage trust assets. * * *
* * * * * * *
* * * The term “right,” certainly when used in a
tax statute, must be given its normal and customary
meaning. It connotes an ascertainable and legally
enforceable power * * *. Here, the right ascribed to
Byrum was the power to use his majority position and
influence over the corporate directors to “regulate the
flow of dividends” to the trust. That “right” was
neither ascertainable nor legally enforceable and hence
was not a right in any normal sense of that term.
Byrum did retain the legal right to vote shares
held by the trust and to veto investments and
reinvestments. But the corporate trustee alone, not
Byrum, had the right to pay out or withhold income and
thereby to designate who among the beneficiaries
enjoyed such income. Whatever power Byrum may have
possessed with respect to the flow of income into the
trust was derived not from an enforceable legal right
specified in the trust instrument, but from the fact
that he could elect a majority of the directors of the
three corporations. The power to elect the directors
conferred no legal right to command them to pay or not
to pay dividends. A majority shareholder has a
fiduciary duty not to misuse his power by promoting his
personal interests at the expense of corporate
interests. Moreover, the directors also have a
fiduciary duty to promote the interests of the
corporation. * * * their [the corporate directors’]
responsibilities were to all stockholders and were
enforceable according to legal standards entirely
unrelated to the needs of the trust or to Byrum’s
desires with respect thereto.
The Government seeks to equate the de facto
position of a controlling stockholder with the legally
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