5th Cir. Pattern Jury Instr. (Civil) 12.7

A gift made by a person within the three years immediately before [his/her] death is presumed to have

been made in contemplation of death. Unless Plaintiff

[name] establishes by a preponderance of the evidence

that the gift by [name of deceased] was not made in

contemplation of death, the fair market value of that

gift must be included in [name of deceased]’s gross

estate for federal estate tax purposes.

The Commissioner of Internal Revenue determined

in this case that the gifts were made in contemplation

of death, and therefore assessed additional taxes

against the estate. Plaintiff [name] challenges the Commissioner’s determination.

The term “in contemplation of death” does not refer

to the general expectation of death that all of us share.

On the other hand, its meaning is not restricted to a

fear or belief that death is imminent or near. Rather, a

transfer is “in contemplation of death’ if it is prompted

by the thought of death (although the thought of death

may not be the only thing that prompts it). A transfer

is prompted by the thought of death if it is made either

with the purpose of avoiding death taxes, or if it is made

for any other motive associated with death.

The issue is [name of deceased]’s state of mind

when the transfer of property was made. Stated another way, you must determine what prompted [name

of deceased], at the time of transfer, to make the

transfer. You must determine [his/her] motives by

considering all of the facts and circumstances surrounding the transfer.

In this connection, you should consider the following questions:

1. What was [name of deceased]’s age at the time

12.7TAX REFUNDS

323

of the transfer? A transfer made by a person in

advanced years is more likely to be in contemplation of death than a transfer made by a

person who is not advanced in years.

2. What was the cause of [name of deceased]’s

death? A transfer made by a person who is in

bad health and who knows of the bad health is

more likely to be in contemplation of death than

a transfer made by a person who is in good

health and who knows of the good health.

3. What was the relative value of the property

given away? If the value of the property transferred by [name of deceased] is small in comparison to the overall value of his/ her estate,

this is an indication that the transfer was not

made in contemplation of death. However, if

the property transferred had a substantial

value and comprised a substantial portion of

[name of deceased]’s estate before the transfer,

this may be an indication that the transfer was

made in contemplation of death.

4. Who was the recipient or donee of the gift? A

transfer to a person who would normally have

received the property upon the transferor’s

death is more likely to be in contemplation of

death than a transfer to a person who would

not normally have received the property upon

the transferor’s death.

5. Had [name of deceased] made such gifts before?

If a person had a history of making gifts, this

indicates that the transfer involved was not

made in contemplation of death. If [name of

deceased] did not have a history of making

gifts, the fact that he (she) began making gifts

shortly before death is an indication that they

were made in contemplation of death.