Estate of Lucille P. Shelfer, Research Paper Example

 What is Rule 122 (a)

This rule of court identifies the significance of transfer of properties to a joint owner of the element and the adjoining power of the implication of responsibilities that are placed upon the said property. For instance, if a couple owns a land property and one of them dies, the succeeding person [the widowed] will take possession of the said property including that of the responsibilities that comes with it especially in relation to paying taxes.

Basing from the assumptive role of QTIP, or Qualified Terminable Interest Property, each citizen in the United States is given the right to be granted a credit against estate tax. Especially when the property inherited [or in this case left under the possession of the succeeding owner] has a lower rate of value than that of the tax that is placed upon it. Relatively, the case of Lucille Shelfer in relation to her claiming of the property that she and her husband shared imposes that the principle of QTIP be applied in her situation therefore freeing her from the responsibility of paying the impending tax on the said estate property.

This then would indicate that she is not to be pushed to pay for the taxes as part of the transfer of rights process. Relatively though, she is entitled to get amicable rate of profit or income that would come from the said property.

Although this is the case, not all those invited to hear the case admitted and accepted the said final judgment on the occurrence of tax exemption and the parallel assumption on how much the succeeding owner of the estate is to be given right to the resulting profit from the property. According to Judge Rymer, the final release of assumptive judgment on the case should not be based solely on the Howard v Commissioner case where as the surviving spouse receives all the income which was accrued during her full lifetime. The reason for this dissent is based on the fact that the spouse on the said case had children to support. Not all the income went to her shares which means that she simply partake on what the profit rate allotted for her apart from what was given to her children. In a way, this indicates that the succeeding owner of the estate did not receive “all income” as it is being assumed by Mrs. Shelfer.

Nevertheless, the majority continues to stand by their final decision because they see that the application of QTIP in the case is valid. The clauses of QTIP in support with that of the clauses of rule 122(a) presents the consideration that must be given to the surviving spouse, whether or not she has children. This indicates that the profit that would be gained from the property is supposed to be solely given to the new owner of the property who is Mrs. Shelber. The transfer of the property itself entitles her to the income in full accord of her right of ownership.

It is stipulated though that a qualifying income interest that shall be provided to Mrs. Shelber upon the property’s earning of profit shall be able to pass certain conditions. First among these conditions include the fact that the spouse should be entitled to a measure of relative release of profit rate which she could get in certain target times only. This means that the income shall be released on specific dates as per agreed in the court.

It is however because of the considerations stipulated herein that the majority opinion forgoes estate tax that was supposed to be paid by Mrs. Shelber approximately amounting to more than $2 million. This would then escape taxation all the while suggesting that Mrs. Shelber should even get the ‘fair share’ from the income returns of the property annually.

How many judges were involved?

There are at least thirteen judges involved in the case, nevertheless, the final opinion was only agreed by at least eight individuals who stipulated that the right of Mrs. Shelber should be recognized accordingly as she is the spouse of the deceased and the property left was to be distinguished to be under the ownership of the couple.

How many judges agreed to the majority opinion?

Although there were several points of dissents that other judges had to contend with during the hearing of the case, eight judges finally arrived at a majority opinion.

In the finalization of the case’s status, the judges provided an indicative solution to the matter with respects to the rule of marriage and spousal connection. The legislative history of the United States is assumed to follow the intent of the congress, which is to recognize a husband and a wife to be one single unit of economy. Therefore, if one dies and the other is left, the rights to property including that of the income that comes from it shall be fully transferred to the one left behind.

This intent is supported by the irrevocability of QTIP once applied in a property that is owned by a couple. The tax status of the property however shall be subjected to several stipulations before it could be granted credit and shall be waived for the sake of the survivor’s right to gaining the benefits of the property as a whole.

Although the spouse [who is left by the deceased one] is considered a different person, a different taxpayer, the fact that they are bonded by the law through marriage rights gives each other a chance to enjoy the rights of the other especially when it comes to considering estate property. Since the QTIP application in the case is determinative, Mrs. Shelber is then granted to be waived from paying the property’s tax while also given the chance to enjoy the income it earns in an annual schedule of release and collection.