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"Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes." Attribution: Benjamin Franklin (1706-1790), U.S. statesman, writer. From a letter dated November 13, 1789; see Complete Works, vol. 10, ed. John Bigelow (1887-1888). Judge Berzon, in Brown v. U.S., __ F. 3d __, 91 AFTR 2d 2003-2085 (9th Cir., May 1, 2003), begins an entertaining and informative opinion by echoing Benjamin Franklin's immortal words, with: "The estate tax combines into one sad transaction the only two certainties in life. Upon death, a decedent's estate must pay a tax on property owned immediately prior to death, subject to certain adjustments. . . . This appeal involved three of those adjustments."
Mr. Brown died in 1993 with an estate of approximately $180 million. Before his death, he gave his wife $3.1 million to fund a life insurance trust. His wife's subsequent transfer to the insurance trust was subject to gift tax, resulting in a $1.4 million gift tax liability. Mr. Brown then gave his wife an amount of money equal to the exact gift tax liability. She deposited the money in her own account and the next day wrote checks payable to the Service.
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