Wier v. Commissioner

Estate of Robert W. Wier, Deceased, Mary Norwood Wier and Tom P. Wier, Executors, Petitioners, v. Commissioner of Internal Revenue, Respondent Wier v. Commissioner Docket No. 27538 United States Tax Court 17 T.C. 409; 1951 U.S. Tax Ct. LEXIS 86; September 25, 1951, Promulgated *86 Decision will be entered under Rule 50. 1. In 1935, decedent and his wife established two trusts, one for each of their minor daughters, with the corpus and accumulated income to be distributed to the beneficiaries on their twenty-first birthday. Decedent frequently made gifts to the trusts prior to his death in 1945, which occurred before either trust terminated. The trustees were to distribute when necessary to the beneficiary the income and corpus for "the education, maintenance and support" and "in the manner appropriate to her station in life." During his lifetime decedent as a cotrustee made no distributions to the beneficiaries. Held, that the transfers were not made in contemplation of death, section 811 (c) of the Internal Revenue Code, and the power retained by decedent as trustee did not constitute either the right to designate who shall possess or enjoy, section 811 (c) of the Code, or the power to terminate the trust, section 811 (d) of the Code. Jennings v. Smith, 161 F. 2d 74, Estate of C. Dudley Wilson, 13 T. C. 869, affd. per curiam 187 F. 2d 145. Respondent erred*87 in determining that the value of the trusts was includible in decedent's gross estate. 2. More than two years prior to his death decedent gave to each of his daughters 150 shares of Humble Oil Company stock. Held, these transfers were not made by decedent in contemplation of death, section 811 (c). 3. Decedent on May 12, 1931, 14 years prior to his death, conveyed to his wife by warranty deed his community interest in their homestead property located in the city of Houston, Texas, "for her own use and benefit and her separate property." The deed was complete and made no reservations of any kind to remain in decedent. Respondent included in decedent's gross estate one-half the value of the real property as a transfer by decedent during his lifetime of property with possession or enjoyment retained, section 811 (c) of the Code. Held, the Commissioner erred in including this one-half of the value of the property in decedent's gross estate. Harry R. Jones, Esq., and George D. Jacob, Jr., Esq., for the petitioners. F. S. Gettle, Esq., for the respondent. Black, Judge. BLACK *410 The Commissioner has determined a deficiency in the estate tax of the estate of Robert W. Wier, deceased, in the amount of $ 246,758.45. The deficiency results from additions to the $ 684,560.88 net estate reported on the estate tax return of a net amount of $ 652,345.21. The net amount of $ 652,345.21 which*89 the Commissioner added is explained in the deficiency notice as follows: (1) Real estate value increased $ 2,500.00 (2) Insurance 46.41 (3) Other property 2,988.30 (4) Transfers during decedent's life 630,026.22 (5) Expenses disallowed 17,100.00 (6) Debts decreased .40 Total additions 652,661.33 (a) Deductions from value of estate: (7) Stocks and Bonds overstated plus error 316.12 (b) Net addition to value, (a) minus (b) $ 652,345.21 Adjustment (4) shown above is explained in the deficiency notice as follows: Value of Mary Withrow Wier Trust $ 253,284.67 Value of Ann Randolph Wier Trust 253,738.43 Value of 600 shares of Humble Oil and Refining Co. stock 26,625.00 Value of homestead 20,000.00 Value of Mary Norwood Wier's separate estate of cash and securities -- 1/2 interest 76,378.12 Total value of these additions $ 630,026.22 At issue in this proceeding are the following additions made to decedent's gross estate by respondent as transfers by decedent during his lifetime: Value of Mary Withrow Wier Trust $ 253,284.67 Value of Ann Randolph Wier Trust 253,738.43 Value of 600 shares of Humble Oil and Refining Co. stock 26,625.00 Value of homestead 20,000.00 *90 Certain adjustments made by respondent in his determination of the net estate are not controverted and after further consideration respondent has conceded two adjustments. Respondent concedes petitioner *411 is entitled to a deduction of $ 10,000 for attorney's fees, the amount claimed on the estate tax return, and respondent also concedes that transfers of cash and securities aggregating $ 76,378.12 made by decedent to his wife during his lifetime are not to be included in decedent's gross estate. Effect will be given to respondent's concessions under Rule 50. There remain for our consideration three issues. The first issue is whether the two trusts established by decedent and his wife for their two daughters are includible in the estate under section 811 (c) or 811 (d) (1) of the Code; the second issue is whether the value of the shares of Humble stock given in equal amounts to his two daughters is includible in the estate as transfers in contemplation of death; and the third issue is whether the value of decedent's interest in the Wier homestead, if any, which after decedent's gift to his wife in 1931 was her separate property, is includible in the gross estate of decedent*91 under the provisions of section 811 (c) of the Code. FINDINGS OF FACT. General Facts. Robert W. Wier died on October 30, 1945. He was then, and for many years had been, a resident of Houston, Harris County, Texas. He left a will which was duly admitted to probate in the County Court of Harris County, Texas. In his will he named and appointed his brother, T. P. Wier, and his wife, Mary Norwood Wier, as independent executor and independent executrix, respectively, of the will and of his estate. They duly qualified and have since continuously acted in these capacities. The estate tax return for the estate was filed in the office of the collector of internal revenue for the first district of Texas at Austin, Texas. Robert W. Wier was born on July 4, 1873. At the time of his death he was 72 years of age. He married Mary Norwood Wier on July 14, 1925. She and their two daughters, Ann Randolph Wier, born January 2, 1927, and Mary Withrow Wier, born August 7, 1929, survived him. Decedent led an active busy life until October 25, 1945, when he suffered a coronary occlusion from which he died on October 30, 1945. For many years he had been engaged in the lumber business. He organized*92 the R. W. Wier Lumber Company in 1907, and continued as the manager and president of this company until the year 1945, when he personally negotiated a sale of the stock of this corporation, acting in his own behalf and as representative of the other stockholders. *412 In 1917, decedent organized the Wier Long Leaf Lumber Company of which he was a large stockholder, its president, and its acting managing head from the time it was formed until the date of his death. This company owned and operated a lumber mill at Wiergate, Texas, for many years and went into liquidation in December 1942. Decedent supervised and directed this liquidation which was still continuing at the time of his death. In addition to the above, decedent handled his own personal business affairs which were quite extensive. His Houston office was open five days a week and he was there every day, coming early and staying late, until the time of his last illness. Decedent owned a substantial estate, had enjoyed outstanding success in business, and had suffered no business reverses or other misfortunes. Decedent was active in public affairs, having served at one time as president of the Houston Chamber of Commerce. *93 He belonged to numerous social and fraternal organizations in which he remained active until his last illness. He was a member of the board of directors of Houston Lighting & Power Company and of the Second National Bank of Houston and regularly attended board meetings. Prior to October 25, 1945, decedent had suffered no serious illnesses. Over the years he had a prostate correction, phlebitis, a nasal operation, and other illness of a minor nature from which he had apparently recovered a number of years before his death. He had suffered no previous heart trouble. He continued vigorous physically until his last illness. He enjoyed hunting and fishing; he had enjoyed a hunting trip only a few days before, and was planning another at the time he was stricken. He continued to drive his own car until his last illness. His home life was completely congenial and happy. He was devoted to his wife and children. On October 24, 1945, he had spent a busy day at his office and an enjoyable evening with his family and with guests visiting in his home. Neither his wife, his physician, nor his close business associates had sensed any change in his mental attitude, any moroseness, or any*94 indication that he felt that death was impending. There was no change in any of his habits, and he remained in the best of spirits until the time of his last illness. On October 25, 1945, decedent suffered a coronary occlusion from which he died on October 30, 1945. Decedent enjoyed good health in 1931, in 1935, in 1943, and in 1945, prior to his last illness, as well as during the intervening years. Issue No. 1. On December 31, 1935, Mr. and Mrs. Wier joined in the execution of two trust indentures in which they established separate trusts for *413 each of their two minor daughters, Ann Randolph Wier, then 8 years of age, and Mary Withrow Wier, then 6 years of age. These trusts are referred to herein as the "Ann Randolph Wier Trust" and the "Mary Withrow Wier Trust." Decedent and his brother, T. P. Wier, were named as cotrustees of each of these trusts; they qualified and continued to act in that capacity until the time of decedent's death. On June 27, 1945, decedent and his wife executed an assignment of any reversionary interest which either of them might have had in the trusts to Christ Episcopal Church, Houston, Texas. At the time the trusts were established, decedent*95 and his wife gave to each trust stocks having a value of approximately $ 50,000. Thereafter, in each year (except 1939 and 1942) through and including 1944, they made additional gifts to the trusts, some of which were the community property of Mr. and Mrs. Wier, a part the separate property of Mr. Wier, and part the separate property of Mrs. Wier. At the time of decedent's death the assets of the trusts, consisting of stocks and cash and excluding in each instance 300 shares of Gulf Oil Corporation stock which had been given by Mrs. Wier to each trust, had values as follows: Mary Withrow Wier Trust $ 253,284.67 Ann Randolph Wier Trust 253,738.43 Respondent determined that the value of the assets of each trust should be included in the gross estate of decedent as transfers in contemplation of death, transfers with the right retained to designate who shall possess or enjoy, and transfers with the power retained to change the enjoyment. At the time the trusts were established decedent owned an estate having a book value of $ 583,804.94, and decedent's wife owned an estate having a book value of $ 287,185.17. In each instance these values are conservative. In that year, *96 as well as in all subsequent years, decedent enjoyed a very substantial income and was fully able to provide and did provide for the maintenance and support of his family. The two trusts have similar provisions. Article III of each trust instrument provides, in part, as follows: Out of the trust estate hereby created and as the same may hereafter be augmented and increased by gift from the Grantors or either of them as herein provided for, or from any other source whatever, the Trustees shall expend from time to time as they may deem necessary or proper for the support, maintenance and education of our said daughter such sum or sums as such Trustees shall in their sole discretion consider to the interest and advantage of our said daughter, using only income of said estate for that purpose if it be sufficient. If it be necessary to use any of the corpus of the estate for that purpose, and in the judgment of the Trustees, it is best so to do, said Trustees may make advancements out of the corpus of said Trust estate for such purpose for the benefit of our said daughter. *414 It is contemplated, however, that our said daughter will have adequate and sufficient means of support *97 from sources other than this trust estate, and that it will not be necessary or proper to use either the income or the corpus of the trust estate hereby created to provide properly for her education, maintenance and support; and the trustees are hereby authorized and directed to accumulate and pass to capital account of said trust estate any and all income from the trust estate which, in their discretion and judgment, is not necessary or proper to be applied to the education, maintenance and support of our said daughter, it being our hope that all of the earnings and income of said trust estate during the period of this trust may be used to augment the trust estate and be delivered to our daughter at the termination of the trust as hereinafter provided. It is expressly provided, however, that our said daughter shall be properly maintained, educated and supported in the manner appropriate to her station in life, and if, in the discretion and judgment of the said Trustees, it be necessary to that end, at any time or times, to use all of the income or even all of the corpus of the trust estate hereby created and all augmentations thereof, it shall be the duty of the Trustees to see that*98 our said daughter shall be properly maintained, educated and supported. Article Six of each trust instrument provides, in part, as follows: The Grantors herein, without in any respect retaining any interest in the trust estate hereby created, or in any benefits accruing therefrom, which trust is made absolute and finally irrevocable, do hereby reserve unto themselves jointly, and to the survivor of them, the right, power and privilege, notwithstanding any provision heretofore set forth herein, to remove from time to time any trustee at the time acting hereunder, and to name and appoint a successor to such trustee. In order for such removal to be effective, the Grantors herein or the survivor of them, as the case may be, shall by an instrument in writing, directed to the Trustees then acting, give notice of such Trustee's removal, and the appointment of his successor. It is understood, however, that this power shall not extend to the removal of R. W. Wier as Trustee nor to the removal of Mary Norwood Wier, should she, under any provisions hereinafter written, become Trustee. * * * * Said designation of a new Trustee may be made whenever and as often as the Grantors herein named or*99 the survivor of them shall deem it to the best interests of the trust estate; * * * Each of the trust indentures was irrevocable, the gifts to the trusts being absolute and complete. Each indenture provided that the trust should continue until the beneficiary arrived at the age of 21 years, that it should then terminate and the trust assets should be distributed to the beneficiary. Each trust further provided that if the beneficiary should die before attaining the age of 21 years leaving issue surviving, then the trust would continue for the benefit of such issue; that if the beneficiary should die leaving no issue, then the trust fund should go to the other daughter of the donors, or to her issue, or if she too be then deceased without issue, then in that event the trust fund should pass and be distributed to Mary Norwood Wier. The instruments each contained further provisions as to alternative disposition in the event Mary Norwood Wier should be also then deceased, but *415 there was no possibility of any portion of the trust reverting to decedent. At all times after the trusts were established other means available to the beneficiaries were sufficient to provide properly*100 for their maintenance, education, and support and no part of the income or corpus of either trust was ever used for any of these purposes. All income of the trusts was accumulated and added to the trust corpus by the trustees. Both the income and corpus remained in the trusts, and no part was distributed to or used for the benefit of either beneficiary, or to or for either of the grantors prior to the date of decedent's death. Issue No. 2. On October 1, 1943, decedent gave 150 shares of Humble stock to each of his minor daughters, Ann Randolph Wier and Mary Withrow Wier. Ann was then about 17 years of age and Mary was 14 years of age. This stock was later split on a two-for-one basis and each of the minor daughters still owned the resulting 300 shares at the time of decedent's death. Respondent determined that this stock, having a value of $ 26,625 at date of death, should be included in decedent's gross estate as transfers in contemplation of death. Prior to the time the gift of Humble stock was made, decedent's brother, T. P. Wier, had told him in the presence of Mrs. Wier that he, T. P. Wier, had been making outright gifts to his minor children, that he had opened separate*101 bank accounts for them in which the dividends from these stocks were deposited, that he felt that by so doing he was giving them business training and experience, building up an estate for them, and at the same time getting the benefit of the statutory gift tax exclusion. Decedent's wife then asked decedent "why we didn't do the same thing," and the gifts were made shortly thereafter. On decedent's instructions, separate books were immediately opened for the girls in which the stocks were set up and separate bank accounts were opened for them in which all dividends from the stocks were deposited. No part of these dividends was ever used by decedent for any purpose. Decedent continuously evidenced a desire that his children should interest themselves in these stocks and in their personal business affairs. He would bring home and discuss with them their dividend checks, and on at least one occasion he had the bookkeeper explain her books to one of the daughters. In making the gifts of Humble stock to his daughters, decedent was impelled by purposes associated with life rather than death; they were not transfers in contemplation of death. *416 Issue No. 3. Between February*102 1929 and November 1932, decedent made various gifts to his wife, Mary Norwood Wier. The gifts included a conveyance of Lot 20, Broadacres Addition, Houston, Texas, the deed being dated May 12, 1931, and having been recorded on November 3, 1943. The property was conveyed to Mary Norwood Wier "for her own use and benefit and her separate property." It constituted the family homestead of the decedent and his family. At the date of decedent's death, Mary Norwood Wier still owned Lot 20 with the house on it, which premises were known as 1411 North Boulevard, Houston, Texas. One-half interest in the house and lot valued at $ 20,000 was included by respondent in the decedent's gross estate as a transfer with possession or enjoyment retained. Ultimate Fact. None of the gifts in question were transfers made by decedent in contemplation of death. OPINION. There are three issues to be decided in this controversy. All issues relate to transfers by the decedent during his lifetime of various properties which were added to the decedent's gross estate in the respondent's deficiency determination. Issue No. 1. As the first issue we consider the decedent's transfers to the Ann Randolph*103 Wier Trust and the Mary Withrow Wier Trust. The two trusts, established in 1935 by decedent and his spouse for their two minor daughters, were identical. Each trust was to continue until the beneficiary reached the age of 21 years, at which time it would terminate and the assets would be distributed to the beneficiary. In the event the daughters failed to live to reach the age of 21 years, contingent beneficiaries were designated in the trust indentures with no possibility of reversion to decedent. Gifts to the trusts were made by decedent and his wife in 1935, and in almost every year thereafter up until his death. The combined gifts made by decedent and accumulated income increased the corpus of each trust until on October 30, 1945, the value of each trust was approximately $ 253,000, excluding in each instance the value of 300 shares of Gulf Oil Corporation stock which had been given by Mrs. Wier to each trust. No withdrawals of income or corpus were ever made by the trustees for the beneficiaries. *417 Decedent was 62 years old when the trusts were established, and his daughters were ages 6 and 8. Decedent was cotrustee with his brother, and while decedent could not*104 be removed as trustee, his brother could be removed by the settlors. Respondent contends that decedent's gifts to the trusts were: (1) transfers in contemplation of death, see Regulations 105, section 81.16; (2) transfers with right retained to designate who shall possess or enjoy, see Regulations 105, section 81.19; and (3) transfers with power retained to change the enjoyment, see Regulations 105, section 81.20. We think that the respondent erred in including in decedent's gross estate the value of the assets of the two trusts and that his determination is not supported by either section 811 (c) or 811 (d) of the Code. Respondent, in contending that the transfers were made in contemplation of death, relies upon United States v. Wells, 283 U.S. 102. In that case the only gifts in question were those made by Wells within the presumptive period of 2 years prior to his death. The transfers made by Wells prior to the presumptive period were not included in his gross estate and were not at issue. The Court of Claims made Findings of Fact and in its Opinion concluded that the gifts were not made in contemplation of death. The Supreme Court refused*105 to disturb the trial court's conclusion as there was support in the Findings of Fact for such an ultimate fact. None of the gifts made by Wells were made to trusts. In the instant proceeding, however, respondent would include in decedent's gross estate the gifts made by decedent to the trusts during a 10-year period prior to his death. During this time decedent enjoyed good health and was actively engaged in business. We have considered carefully the facts presented in this proceeding and weighing the testimony of witnesses, the decedent's widow, his brother, his secretary, and his physician, and based upon all the evidence and in accordance with United States v. Wells, supra, we conclude that the transfers of decedent to the two trusts were not made in contemplation of death. Respondent relies also upon another portion of section 811 (c)1 of the Code to support his determination that the assets of each trust are to be included in decedent's gross estate. Respondent argues that decedent made transfers of property in which he retained the right to designate the persons who shall possess or enjoy. This provision of the Code is applicable, contends*106 respondent, for decedent was *418 serving as trustee, decedent, with the concurrence of his wife, possessed the power to replace the cotrustee, and the trustees possessed the power under Article III of the trust indenture to "see that our said daughter shall be properly maintained, educated and supported," and "in the manner appropriate to her station in life." In order to effect this power the trustees were authorized to vary other provisions of the trust instrument which instructed them to accumulate income and retain the corpus intact. *107 The rule of law is settled that a decedent's power to withhold income from the trust beneficiary or add it to the corpus that may pass to others constitutes a right to designate the persons who shall enjoy. Estate of Cyrus C. Yawkey, 12 T.C. 1164, and cases cited there. All the cases cited by respondent in his brief concern this question of law which is not disputed by petitioner. Respondent has assumed that the decedent has retained the right to designate who shall possess or enjoy, and it is here that respondent erred. We agree with petitioner that the issue here is the existence or the nonexistence of power in the trustees to designate who shall possess or enjoy. The powers of trustees are to be determined from the trust indenture, and we must consider the language of the Wier trust indentures in the terms of Texas trust law and in the light of the fact situation surrounding the trusts. We must consider in each proceeding the terms of trust indentures presented as the trustees' powers and duties, their number and nature, vary from trust to trust. We think that decedent, as trustee or otherwise, held no power to designate who was to enjoy, and*108 the respondent, therefore, erred in including the assets of the trusts in the decedent's estate. The trustees of the Ann Randolph Wier Trust and the Mary Withrow Wier Trust were vested with no discretionary power to designate who was to enjoy. We have on other occasions considered provision of other trust indentures and decided whether decedent retained the discretionary power to distribute or accumulate the trust income. The retention of such a power by decedent may satisfy section 811 (c), with the trust assets to be included in the gross estate. Estate of Milton J. Budlong, 7 T. C. 756, affirmed and reversed in part on other issues, 165 F. 2d 142; Estate of Cyrus C. Yawkey, supra. The standard of control for the action of the cotrustees in accumulating or distributing the trust income of the Wier trusts is quite similar to the standard considered by the court in Jennings v. Smith, 161 F. 2d 74. Like the Jennings case, the standard established in the Wier trusts was such that the acts of decedent and his cotrustee in accumulating or distributing the*109 income were ministerial, and, as such, the acts of the trustees were duties enforcible by mandate of a court of equity. We do not understand the action of the trustees was discretionary, see Bogert, Trusts and Trustees, section 552. *419 In his brief respondent relies upon two cases: Loughridge's Estate v. Commissioner, 183 F. 2d 294, and Commissioner v. Holmes, 326 U.S. 480. In Loughridge's Estate v. Commissioner, the issue was whether decedent controlled, directly or indirectly, the decision of the corporate trustee who clearly possessed the power to terminate the trust. In Commissioner v. Holmes, the question was one of statutory construction involving the meaning of "revoke" and "terminate" and there was no question but that the decedent Holmes retained the power to terminate the trust, see paragraph 11 of the trust indenture quoted at page 573, Estate of Harry Holmes, 3 T. C. 571. We do not consider these cases controlling for in both there was no controversy concerning the power of the trustee to terminate the trusts, section 811 (d). Here the trustees*110 had no power to terminate the trusts. Each trust was to continue until the beneficiary reached the age of 21 years, when it was to terminate automatically. This termination date, the trustees had no power to change. We conclude that respondent's inclusion of the trust assets in decedent's estate is not warranted by reason of that provision in section 811 (c) of the Code wherein it reads: "(2) the right * * * to designate the persons who shall possess or enjoy the property or the income therefrom." Neither do we think that respondent's inclusion in the gross estate is supported by respondent's third and final argument that enjoyment of the corpus transferred in trust was subject to change through exercise of power by the decedent to alter, amend, revoke, or terminate, section 811 (d) (1) of the Code and Regulations 105, section 81.20. The respondent's position in reliance on section 811 (d) (1) must fail for the same reason that his second argument failed. In Jennings v. Smith, supra, respondent's reliance on both section 811 (c) and section 811 (d) (1) was considered by the court of appeals. The power of decedent Jennings over the corpus of*111 the trust was restricted by the trust indenture to such an extent that the court held that the trust indenture contained an external standard. The restrictions of the grantors upon the trustees of the Wier trusts were not unlike those in Jennings v. Smith, supra, and those we considered in Estate of C. Dudley Wilson, 13 T. C. 869, affd. per curiam, 187 F. 2d 145, where the standard was such as to make the action of the trustee subject to court control. In the latter case where decedent who was not a trustee and who had expressly relinquished all interest in the trust property and divested himself of all incidents of ownership, we held that he had no power to terminate the trust despite his retained power to change the trustee and the trustee's discretion to "accelerate payments of interest or principal in case of need for educational purposes or because of illness or for any other good reason" and that the value of the trust corpus was not includible in decedent's gross estate under section 811*420 (d). This latter case reviews the authorities which we think are applicable here and*112 are controlling here as they were in the Wilson case, supra. See Estate of Milton J. Budlong, supra, where decedent's power as trustee to invade corpus was subject to a definite standard: sickness or other emergency of the beneficiary. An entirely different standard was established in the trust indentures in Estate of Cyrus C. Yawkey, supra, relied upon by respondent, where we held that "best interest of the beneficiary" was not an external standard. We think that the provision of the trust indentures in the instant case authorizing the trustees to invade corpus of the Wier trusts establishes an external standard, and the trustees had no power over enjoyment of the trust. Respondent, therefore, erred in including the assets of the two trusts in the decedent's estate. Issue No. 2. More than 2 years prior to his death decedent gave 150 shares of Humble Oil & Refining Company common stock to each of his two daughters. The gifts were final and complete. The respondent does not contend that decedent retained any interest in these gifts, but only contends that these gifts are includible in decedent's estate under*113 the "contemplation of death" provisions of section 811 (c). The evidence concerning the condition of decedent's health, his activities, the size of the gifts, and decedent's motives was overwhelming to the effect that these gifts were made from motives of life and not in "contemplation of death," and we have found that these gifts were not made by decedent in contemplation of death. Respondent, therefore, erred in including the value of the shares of stock in the gross estate of decedent. Issue No. 3. In 1931, decedent transferred by deed his community property interest in the fee of certain real property to his wife. In the deficiency notice respondent determined that the property was the homestead of decedent and his family and included in decedent's gross estate one-half the value of the property on the grounds that the property was transferred by decedent during his lifetime with the right retained to possess or enjoy the property. The value placed on the property is not contested; petitioner contends only that respondent erred in including in decedent's gross estate an interest in property which was the separate property of decedent's wife. We think petitioner must be*114 sustained as to this issue. The stipulation of facts contains the following paragraph: 13. Between February, 1929 and November, 1932 Mr. Wier made various gifts to his wife, Mary Norwood Wier, * * * At the time of Mr. Wier's death, she still owned Lot 20, Broadacres Addition, Houston, Texas, with the house upon *421 it, and she also owned a substantial separate estate representing investment and reinvestment of her separate property. Lot 20, Broadacres Addition, was conveyed to Mary Norwood Wier "for her own use and benefit and her separate property," the deed being dated May 12, 1931, and having been recorded on November 3, 1943. * * * Respondent determined that a one-half interest in the house and lot, valued at $ 20,000.00, should be included in the gross estate as a transfer with enjoyment or possession retained. He deducted $ 88,500.00, the value of gifts made prior to March 3, 1931, from the value of the remainder of Mrs. Wier's separate estate, and also determined that half of the remaining properties, such one-half being valued at $ 76,378.12, should be included in the gross estate as transfers with possession or enjoyment retained. The Commissioner now concedes*115 that he erred in including the $ 76,378.12 mentioned above. In his brief respondent says: * * * The respondent now concedes that none of the cash and securities transferred by the decedent to his wife are includible in the decedent's gross estate by reason of a retention of an interest in the income from such property. However, the respondent continues to maintain that the transfer of the family residence from the decedent to his wife was a transfer in which a right of possession and enjoyment was retained by the transferor and therefore a transfer within the scope of Section 811 (c). * * * We do not think this latter contention of respondent is sound. Long prior to his death, decedent had conveyed to his wife by warranty deed his interest in the family homestead and there were no strings whatever attached to this conveyance. At the time of decedent's death, he owned no interest in this homestead property, retained or otherwise. In Speer's Law of Marital Rights in Texas, p. 487, it is said: Of course, the husband has the sole right of management, control and disposition of his separate property. While he cannot dispose of the homestead without her joinder in the conveyance, *116 yet he may, if in good faith, abandon the homestead, and if the property be his, sell it without her consent. In like manner the right of the wife to control her separate property will control the use of it for a homestead for the family. In 23 Texas Jurisprudence 61, it is said: Within the scope of the statutory control, however, the wife's right is supreme and exclusive and can no more be denied or usurped by the husband than by a stranger. She would be entitled to restrain any threatened interference with her rights and would be entitled to exercise them, whether with the assent of her husband, or over his protest. This control even extends to the use of the wife's separate property for the purposes of a home for the family. Ordinarily the husband selects the dwelling place, but his acknowledged right to do this is subordinate to the wife's superior right to manage and control her separate real estate. In Texas a deed from husband to wife divests him of title and vests his interest in the family homestead in the wife. See Martin v. Barnum, 286 S. W. 550. In this case the court, among other things, said: "We think that it is well established*117 that in some states, including *422 Texas, a deed from a husband to the wife divests him of title and vests in the wife his interest in the homestead." To the same effect is McGovern v. Woolley, 200 S. W. 271, in which the Court of Civil Appeals affirmed the following conclusion of law made by the lower court: I concluded that by the deed dated January 7, 1914, lots 1, 2, and 3 involved in this suit, with all improvements thereon, vested absolutely in the defendant Mrs. Miriam McGovern, and constituted no part of the estate of Sam McGovern at his death, * * * On the facts which have been stipulated we hold that decedent retained no interest whatever in the homestead property which he conveyed to Mrs. Wier by warranty deed dated May 12, 1931, "for her own use and benefit and her separate property." Cf. Commissioner v. Estate of Hinds, 180 F. 2d 930. We decide this issue in favor of petitioner. Decision will be entered under Rule 50. Footnotes 1. SEC. 811. GROSS ESTATE. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, * * * * * * * (c) Transfers in Contemplation of, or Taking Effect at Death. -- To the extent of any interest therein * * * of which he has at any time made a transfer * * * under which he has retained * * * (2) the right * * * to designate the persons who shall possess or enjoy the property or the income therefrom; * * *↩