TAXATION - DEATH TAXES - GIFTS IN CONTEMPLATION OF DEATH

The problem arising when estate and inheritance taxes reach out and attempt to include transfers which have been completed inter vivos are of current importance in state and federal litigation. A survey of the cases shows that the courts and legislatures are making a constant effort to fix and determine a workable rule for the application of a tax on transfers which have been made in life under circumstances so closely related to death that they may, in nature and effect, be properly classified as transfers made in contemplation of death. The problem is of no small moment, for perplexing and divergent views are to be found in the vast body of litigation that has arisen under both the state and federal statutes. Moreover, there appears to be a trend to extend the scope of the tax on transfers in contemplation of death, resulting in proposals for clarification and modification of this part of the tax structure. The aim and purpose of this comment will be: (1) to ascertain the present rule for classifying transfers inter vivos as being made in contemplation of death; (2) to determine if there is any present trend towards a broader interpretation of the tax; (3) to present modifications that have been suggested to remedy the difficulties in the application of this feature of the tax law. No attempt will be made to discuss the closely related questions of gifts not absolutely completed during the life of the transferor, or transfers to take effect in possession and enjoyment at or after the transferor\u27s death