Estate tax; gratuitous transfers to heirs before death

QUESTION: TESTATOR wrote a will on September 8, 2000. On the same day, he donated several pieces of land as gifts to his children. At that time, TESTATOR was already 85 years old, suffering from cancer of the skin which has been declared incurable and deadly.

Are the gifts to his children "transfers in contemplation of death"?

ANSWER: Yes, they are transfers in contemplation of death. There are three reasons.

First, donations made to compulsory heirs before the TESTATOR's death are included in collation and are deemed advance legitimes. Hence, the transfer, even if styled inter vivos, is actually mortis causa. Hence, they are part of the gross estate for estate tax purposes.

Second, according to the Supreme Court, there is a presumption that gifts have been made in contemplation of death if they were given within a short time from or simultaneously with the making of the TESTATOR's will.

Third and finally, considering that the transfer was gratuitous and the obvious intention was to evade the imposition of estate taxes, it is safe to say that it was "in contemplation of death" for purposes of estate tax.