Lyeth v. Hoey
Encyclopedia
Lyeth v. Hoey, 305 U.S. 188
(1938), was a United States Supreme Court
decision holding that property received by an heir under a settlement agreement resolving a dispute over the decedent's will is property acquired by "inheritance," which exempts the value of such property from the income tax.
," the founder of the Christian Science
religion.
When the will was offered for probate in Massachusetts, there was objection by the heirs upon the grounds, among others, of lack of testamentary capacity and undue influence. After a hearing, the probate court granted a motion for the framing of issues for trial before a jury. In that situation, a compromise agreement was entered into between the heirs, the legatees, the devisees, and the executors under the will and the Attorney General of Massachusetts. This agreement provided that the will should be admitted to probate and letters testamentary issued; that the specific and pecuniary bequests to individuals should be enforced; that the bequest of the residuary estate to the Endowment Trust should be disregarded; that $200,000 should be paid to the heirs, and a like amount to the Endowment Trust, and that the net residue of the estate, as defined, should be equally divided between the trustees of the Endowment Trust and the heirs.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(1938), was a United States Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
decision holding that property received by an heir under a settlement agreement resolving a dispute over the decedent's will is property acquired by "inheritance," which exempts the value of such property from the income tax.
Facts and Procedural Posture
The Petitioner was a grandson of Mary B. Longyear, who died in 1931, a resident of Massachusetts, leaving as her heirs four surviving children and the petitioner and his brother, who were sons of a deceased daughter. In her will, the decedent gave to her heirs certain small legacies. The entire residuary estate, amounting to more than $3,000,000, was bequeathed to an Endowment Trust, the income from which was payable to another trust described as the Longyear Foundation. The main purpose of the Longyear Foundation was to preserve "the records of the earthly life of Mary Baker EddyMary Baker Eddy
Mary Baker Eddy was the founder of Christian Science , a Protestant American system of religious thought and practice religion adopted by the Church of Christ, Scientist, and others...
," the founder of the Christian Science
Christian Science
Christian Science is a system of thought and practice derived from the writings of Mary Baker Eddy and the Bible. It is practiced by members of The First Church of Christ, Scientist as well as some others who are nonmembers. Its central texts are the Bible and the Christian Science textbook,...
religion.
When the will was offered for probate in Massachusetts, there was objection by the heirs upon the grounds, among others, of lack of testamentary capacity and undue influence. After a hearing, the probate court granted a motion for the framing of issues for trial before a jury. In that situation, a compromise agreement was entered into between the heirs, the legatees, the devisees, and the executors under the will and the Attorney General of Massachusetts. This agreement provided that the will should be admitted to probate and letters testamentary issued; that the specific and pecuniary bequests to individuals should be enforced; that the bequest of the residuary estate to the Endowment Trust should be disregarded; that $200,000 should be paid to the heirs, and a like amount to the Endowment Trust, and that the net residue of the estate, as defined, should be equally divided between the trustees of the Endowment Trust and the heirs.
Issue
The question presented was whether property received from the estate of a decedent in compromise of a claim (settlement of litigation) as an heir was taxable as income.Result
Writing for the majority, Chief Justice Hughes held that whether the petitioner would receive any property in his capacity as heir depended upon the validity of his ancestor's will and the extent to which it would dispose of his ancestor's estate. When, by compromise and the decree enforcing it, that disposition was limited, what he got from the estate came to him because he was heir, the compromise serving to remove pro tanto the impediment to his inheritance. As such, the exemption applies.See also
- Estate tax in the United StatesEstate tax in the United StatesThe estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will, according to the state laws of intestacy or otherwise made as an incident of the death of the owner, such as a transfer of property...
- Inheritance taxInheritance taxAn inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...
- List of United States Supreme Court cases, volume 305