Law School Case Brief
In re Searight: Dep’t of Taxation of Ohio v. Miller - 87 Ohio App. 417, 95 N.E.2d 779 (1950)
Ohio Gen. Code § 5332 provides in relevant part that a tax is hereby levied upon the succession to any property passing, in trust or otherwise, to or for the use of a person, institution or corporation, in the following cases: when the succession is by will or by the intestate laws of this state from a person who was a resident of this state at the time of his death, and whenever any person or corporation exercises a power of appointment derived from any disposition of property heretofore or hereafter made, such appointment when made is deemed a succession taxable in the same manner as if the property to which such appointment relates belongs absolutely to the donee of such power, and is bequeathed or devised by said donee by will.
The decedent, George Searight, bequeathed the sum of $ 1000 for the care of his dog, which was to be paid to the dog's caretaker at the rate of 75 cents per day. In determining the inheritance tax due from the estate of the decedent, the Probate Court found that levying a tax on successions to property did not levy a tax upon the succession to any property passing to an animal; that the $ 1000 bequest to the dog was therefore not taxable; and that any remainder of the $ 1000 after the death of the dog, was taxable in the hands of the remaindermen. The Department of Taxation of Ohio appealed to the Court of Appeals, Ninth Appellate District, arguing, inter alia, that the bequest to the extent it was paid to the caretaker for the care of the dog, was not a succession to property passing in trust or otherwise, to or for the use of a person; and in not holding that the bequest of $ 1000 to the extent it was to be paid to the caretaker was a bequest or succession to the caretaker, subject to Ohio inheritance taxes.
- Was the testamentary bequest for the care of the dog valid in Ohio?
- Was the testamentary bequest for the care of the dog subject to the inheritance tax laws of Ohio?
Affirming, the appellate court held that the object and purpose sought to be accomplished by the testator was not capricious or illegal. He sought to effect a worthy purpose – the care of his pet dog. Whether called an “honorary trust” or not, the Court averred that the bequest for the care of the dog, was not in and of itself unlawful. According to the Court, the bequest did not, by the terms of the creating instrument, violate the rule against perpetuities. Although the bequest for the dog was for “as long as it shall live,” the money given for the purpose was $1000 payable at the rate of 75c a day. By simple mathematical computation, this sum of money, expended at the rate determined by the testator, will be fully exhausted in three years and 238-1/3 days. It was thus apparent that the testator provided a time limit for the exercise of the power given his executor, and that such time limit was much less than the maximum period allowed under the rule against perpetuities.
As for the second issue, the Court noted that under Ohio Gen. Code § 5332, a tax shall be levied upon the succession to any property passing, in trust or otherwise, to or for the use of a person, institution or corporation. In the case at bar, the Court held that a succession tax predicated on the amount of money expended for the care of the dog could not lawfully be levied, since the money was not property passing for the use of a "person, institution or corporation.”
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