a life beneficiary was given a power of appointment, the estate in remainder was not taxable until the time arrived for the exercise of the power.22

In still another instance where a remainder was limited to children of the life tenant, or her appointees by will, and it did not appear that she had any children, it was held that the remainder was not presently subject to the transfer tax, since no transfer, defeasible or otherwise, had yet been made.23

One of the provisions of the New York statute, as amended in 1901, reads: "Estates in expectancy which are contingent or defeasible (and in which proceedings for the determination of the tax have not been taken or where the taxation thereof has been held in abeyance) shall be appraised at their full, undiminished value when the persons entitled thereto shall come into the beneficial enjoyment or possession thereof, without diminution for or on account of any valuation theretofore made of the particular estates for purposes of taxation, upon which said estates in expectancy may have been limited." This language indicates a legislative intention to make the statute retrospective, and accordingly it has been decided that the fact that an appraisal of an estate for the transfer tax was made in 1891 does not entitle the owners of contingent or defeasible estates in expectancy which were created by the will of the decedent, but which did not vest in beneficial enjoyment until 1902, to pay the tax on their shares upon the values as determined in 1891. A new appraisal thereof is necessary. Since 1901 the New York statute has been several times amended.23a

22 Matter of Howe, 86 App. Div. 286, 83 N. Y. Supp. 825, affirmed, 176 N. Y. 570, 68 N. E. 1118; Estate of Burgess (N. Y.), 97 N. E. 591. 23 Matter of Clarke, 39 Misc. Rep. 73, 78 N. Y. Supp. 869.

23a Estate of Hosack, 39 Misc. Rep. 130, 78 N. Y. Supp. 983. For other decisions applying the statute as thus amended, see Estate of

§ 94. Future Contingent Estates-Illinois Rule.In Illinois somewhat the same view is taken in taxing future contingent interests as formerly prevailed in New York. To quote from the supreme court: "The tax imposed by section 1 of our statute is fixed upon the 'clear market value of the property received by each person' at the prescribed rate-that is, as shown by the context, the clear market value of the beneficial interest so received. Surely, by such language it was not intended by the legislature that the courts should undertake to ascertain the clear market value of a mere possible interest which, from its very nature, could not have any market value, and which, for all practical purposes, such as taxation, is incapable of valuation. The courts, in order to enforce the immediate collection of such taxes, as the statute seems to contemplate shall be done, cannot change the tax from one on succession to one on property; nor can they classify such remote and contingent interests, and fix the tax or rate of tax upon the whole class, as possibly the law-making power might do or provide for. other course is left open in the practical administration of the statute than to postpone, as was done in this case, the assessing and collecting of the tax upon such remote and contingent interests as are incapable of valuation and as to which the rate and the exemptions cannot be determined. It is apparent that in many cases the tax on remainders, mentioned in section 2 as becoming immediately due and payable, can be immediately ascertained and collected; but in other cases, while, in contemplation of the statute, they are due and payable and remain a lien on the property, their payment cannot be enforced until the amount can be determined by the happening of the event or the Connoly, 38 Misc. Rep. 533, 77 N. Y. Supp. 1113; Estate of Goelet, 78 N. Y. Supp. 47; Estate of Naylor, 120 App. Div. 738, 105 N. Y. Supp. 667, affirmed, 189 N. Y. 556, 82 N. E. 1129.

No

fulfillment of the conditions upon which the beneficial estate itself is made to depend. This construction of the statute leads to its broadest, fairest and fullest enforcement, while to so construe it as to require the fixing and collecting of the tax, immediately upon the death of the donor, upon all interests in property passing or to pass upon any contingency, would embarrass, and for practical purposes might have the effect to defeat, the full operation the statute was intended to have." 24

This doctrine is affirmed by the Illinois court in a subsequent case, where it is decided that if the person ultimately entitled to the beneficial interest in a remainder cannot be identified, or the proportion thereof to which he will succeed cannot be determined, the imposition of the inheritance tax must be postponed until such matters can be definitely understood. The condition contemplated by the statute, observes the court, that will authorize the enforcement of the tax, is one of practical and actual ownership-the possession of the title to something that can be conveyed. The right to succeed, when for all practical purposes a myth, is not subject to taxation, for taxation is intensely real to the taxpayer and should not be levied

24 Billings v. People, 189 Ill. 472, 59 L. R. A. 807, 59 N. E. 798, affirmed in 188 U. S. 97, 47 L. Ed. 400, 23 Sup. Ct. Rep. 272, and approved in Vanderbilt v. Eidman, 196 U. S. 480, 49 L. Ed. 563, 25 Sup. Ct. Rep. 331. According to the Billings case, the tax on remainders under a will giving specified persons life estates with remainders over in case such person should die leaving no children is not presently payable on the death of the testator, notwithstanding the statute provides that the value of the property shall be immediately appraised, and, after deducting the value of the life estate, the tax on the remainder shall be immediately due and payable, as the reversionary interests are insusceptible of valuation and the literal language of the statute must yield to reasonable interpretation.

It is stated in Ayers v. Chicago Title etc. Co., 187 Пl. 42, 58 N. E. 318, that the tax on a remainder, whether vested or contingent, is due and payable upon the death of the testator, unless the remainderman elects to defer payment by giving bond.

upon that which is unreal. If the estates are contingent, they cannot be taxed until they are vested; if they are now vested, but are subject to an estate for years and moreover subject to defeasance, they cannot be taxed until they become indefeasible; and if they are executory devises, they cannot be taxed until the persons who will sometime be beneficially entitled thereto are ascertained. When the basis of the tax, the rate, and the exemption, if any, cannot be fixed, the tax itself cannot be fixed. No other course is left open, in the practical administration of the statute, than to postpone the assessing and collecting of the tax upon such remote and contingent interests as are incapable of valuation, and as to which the rate and the exemptions cannot be determined. The state will then get the tax when the remainderman gets his property. The right to impose the tax presently depends, not upon the character of the estate devised, with reference to its being a contingent or vested remainder, but upon the question whether the person who is now, or will ultimately be, entitled to a beneficial interest in the remainder can be now identified, and whether the proportion thereof to which he will succeed can be now determined.25

In a still later Illinois case on this question the decisions announcing the above doctrine are approvingly cited, and the court, in defining the term "expecta

25 People v. McCormick, 208 Ill. 437, 64 L. R. A. 775, 70 N. E. 350. According to this case, the inheritance tax cannot be assessed at the death of the testator upon the corpus of the estate when property is devised in trust which shall continue for a period of twenty years, during which time annuities shall be paid to certain persons named, among whom the estate shall be distributed at the expiration of that period if they are alive at that time, and, if they are not alive, among persons whom they shall appoint and certain persons named by the testator, the statute authorizing a tax against the person who "shall become beneficially entitled, in possession or expectation, to any property or income thereof," where the tax rate differs according to the relationship to the testator of the person who ultimately becomes entitled to the property.

tion" as used in the statute, adopts this language from one of the previous cases: "An ordinary vested remainder, not subject to any condition or contingency, as where the property is given to A for life with remainder to B, is, under the statute, immediately taxable as the property of B upon the death of the testator, because there the estate is immediately vested in interest in the remainderman, his heirs and assigns. Nothing can defeat it. B's right is absolute. His deed will transfer the property. An execution against him and sale thereunder will convey it. His death cannot affect it. He is beneficially entitled to it ‘in expectation.' This term 'expectation,' as used in our statute, has reference only to possession. The language is, 'by reason whereof any person . . . . shall become beneficially entitled, in possession or expectation, to any property or income thereof.' The term 'expectation' is used, not to denote an expectation of becoming vested both with the title and the possession where neither is now vested, but to denote a condition where the title is vested and the possession is deferred. The term 'in expectation' is used in contradistinction to 'in possession.' Both contemplate a title vested and indefeasible, but in one instance the right of enjoyment is immediate, 'in possession'; in the other, it is postponed, 'in expectation.' As used in this statute, these words last quoted refer to the future possession of an estate now vested which is subject to the immediate enjoyment of another.'' 26

§ 95. Future Contingent Estates-Minnesota Rule. The view formerly prevailing in New York has also

26 Estate of Kingman, 220 Ill. 563, 5 Ann. Cas. 234, 77 N. E. 135. According to this case the value of the estate for years should not be deducted from the value of the remainder and the inheritance tax extended on the balance only, where the will, after it creates a trust for ten years, directs the estate to be divided between the testator's wife and children.