In the case of Commissioner of Internal Revenue v. Bilder, 1961, the Supreme Court ruled on an issue related to estate tax deductions. The decedent had made a will in New Jersey and named his wife as executrix. He also created a trust for her benefit which included all his property except certain specific bequests. Upon his death, federal estate taxes were paid from the general assets of the estate rather than from the trust's corpus (principal). The IRS argued that this payment reduced what was available for distribution to beneficiaries under state law and therefore should not have been deducted when calculating federal taxable value of gross estate. The Supreme Court disagreed with IRS’s argument stating that under New Jersey law, unless explicitly stated otherwise in a will or testamentary document, it is presumed that any debts or expenses are to be paid out from residuary estates before they affect other dispositions such as trusts or specific legacies/bequests; thus these payments did not reduce what was available for distribution to beneficiaries. Therefore, since these payments didn't impact distributions according to state law interpretation by NJ courts at time of decision making process - they could indeed be deducted when determining federal taxable value.

In the dissenting opinion for Commissioner of Internal Revenue v. Bilder, Justice Whittaker disagreed with the majority's interpretation of Section 812(e) of the Internal Revenue Code. He argued that this section should not be read to allow a marital deduction for property passing from a decedent to his surviving spouse where such property is subject to an outstanding life estate in another person at the time it passes. The justice believed that allowing such deductions would contradict Congress' intent when drafting and enacting Section 812(e). According to him, Congress intended only those properties which are outrightly owned by or under complete control of surviving spouses without any encumbrances like life estates in others, qualify for marital deductions. Therefore, he was against extending these benefits beyond what was explicitly provided by law.