Old Colony Trust Co. v. United States
United States Court of Appeals for the First Circuit
423 F.2d 601 (1970)
A settlor of an inter vivos trust named himself as trustee and his son as life beneficiary, with the trust paying the son 80 percent of income while giving the trustees broad discretion under Article Four to increase or decrease that income based on the son's needs or best interests, and under Article Seven to "generally do all things" with the trust the settlor could have done personally. After the settlor's death, the government sought to include the trust principal in his taxable estate, arguing he had retained ownership control; the executor paid the resulting tax and sued for a refund, which the district court denied, and the executor appealed.
Whether trust assets are included in a settlor's taxable estate when he reserves broad discretionary powers for himself as trustee that are not subject to an ascertainable standard a court could enforce on his beneficiary's behalf.