problem. It would seem, therefore, that the Le Gierse case is
inapposite here. True, in the Goldstone case, the Court held that
the proceeds of the life insurance policy should be included in
the gross estate, but note the basis for the holding and the
"The decedent, in making disposition of $25,000 of his property
through these two contracts, retained a valuable interest in that
amount which was not extinguished until he died. He retained not
only the right to semi-annual payments under the annuity contract
but also a contingent reversionary interest in the entire
proceeds of both contracts. Had he survived his wife he could
have exercised the attributes of ownership over the contracts,
changing the beneficiaries or surrendering the contracts as he
saw fit. If he had survived both his wife and his daughters the
proceeds of the two contracts would automatically have been
payable to his estate when he died. Thus the ultimate disposition
of the proceeds of the contracts was suspended until the moment
of decedent's death. Only then did the respective interests of
the wife and daughters become fixed; only then were their
interests freed from the contingency of the decedent's survival.
His death was the decisive fact that terminated all of his
potential rights and insured the complete ripening of the wife's
interests. The transfer of the proceeds of the contracts having
been effectuated finally and definitely at the decedent's death,
as in the Hallock case, [Helvering v. Hallock, 309 U.S. 106, 60
S.Ct. 444, 84 L.Ed. 604] Section 302(c) requires that those
proceeds be included within the decedent's gross estate.
"This conclusion is unaltered by the fact that the wife had the
unrestricted power during the decedent's lifetime to exercise
many important incidents of ownership over the contracts,
including the power to terminate the decedent's reversionary
interest in the proceeds. Whatever the likelihood of the exercise
of this power, it is a fact that the wife did not change the
beneficiaries or surrender the contracts so as to destroy
decedent's reversionary interest. The string that the decedent
retained over the proceeds of the contracts until the moment of
his death was no less real or significant because of the wife's
unused power to sever it at any time.
"The essential element in this case, therefore, is the
decedent's possession of a reversionary interest at the time of
his death, delaying until then the determination of the ultimate
possession or enjoyment of the property. The existence of such an
interest constitutes an important incident of ownership
sufficient by itself to support the imposition of the estate tax.
Helvering v. Hallock, supra. The indefeasibility of that interest
prior to death or the decedent's possession of other powers of
ownership is unnecessary and indecisive of estate tax liability."
Consider, therefore, the facts of the present case in the light
of the Goldstone decision. The decedent here retained no
interest, contingent or otherwise, in the proceeds of the policy,
even in the event that all the beneficiaries predeceased her.
Further, the policy, in regard to ownership thereof, contained
the following provision:
"Owner. The rights conferred upon the Owner by the terms of
this policy shall be vested in the Insured's children, Edwin J.
Bohnen, Theodore G. Bohnen and Virginia E. Bohnen, jointly during
their lifetime. Upon the death of any one of the Insured's said
children, such rights shall be vested in the survivors of them,
jointly during their lifetime, or if only one of them be
surviving, such rights shall be vested in the survivor of them
during his or her lifetime. Upon the death of the last survivor
of the Insured's said children, such rights shall be vested in
the executors or administrators of the last survivor of the
Insured's said children.
"A person while thus vested with the rights of Owner, may,
prior to the death of the Insured, exercise the rights conferred
upon the Owner by the terms of this policy without the consent of
the Insured or any special beneficiary."
From the foregoing, it should be clear that absolutely no
reversionary interest of any type or description was retained or
possessed by the decedent in the instant case. Since, therefore,
that was the "essential
element" in the Goldstone case, its absence here is a valid
distinguishing factor. Insofar as the plaintiffs were concerned,
there was no deferment of possession or enjoyment until at or
after decedent's death, and hence was not within the scope of
For the foregoing reasons, plaintiffs' motion for judgment on
the pleadings is granted, and judgment will, therefore, enter in
favor of plaintiffs. Plaintiffs are directed to prepare and
submit to the Court, within 15 days hereof, a judgment proper as
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